Wednesday, June 4, 2014

Real wage growth around the world

The new edition of the International Labour Organization's Global Wage Report (2012/13) has been published. The figure below shows the rates of growth in real wages by region.
Note that real wages have basically stagnated in the developed world, and have fallen in the Middle East, while they have grown in the rest of the world. One should take with a grain of salt the incredible increase in Eastern Europe. For example, the graph below, showing Russia's real wages, gives a more accurate picture.
Real wages are now slightly above the levels associated with the pre-liberalization, and market reform period. In other words, the commodity boom and the Natural Resource Nationalism have allowed a significant recovery in real wages. Not dissimilar to the Latin American story, by the way.

In Asia a lot of the growth in real wages is explained by the vast migration of rural workers to urban areas in China.
Note that without China the rate of growth in real wages has been considerably less impressive. At any rate, as always, the ILO report provides a wealth of data, which is worth to take into consideration.

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