The Global Wage Report 2020-21 looks at recent trends in wages, the global economic and labour market context, and the impact that the pandemic has had on wages. The report also includes a number of policy recommendations to mitigate the negative impact of the crisis.

As per the report on 

    1. Recent trends in wages, it says

        a. In the four years preceding the COVID-19 pandemic (2016–19), global wage growth fluctuated between 1.6 and 2.2 per cent; when China is excluded from the sample, real wage growth in those four years fluctuated at a lower level, between 0.9 and 1.6 per cent.

        b. In the first half of 2020, as a result of the COVID-19 crisis, a downward pressure on the level or growth rate of average wages was observed in two thirds of the countries.  In other countries average wages increased, largely artificially as a reflection of the substantial job losses among lower-paid workers.

        c. The impacts of the crisis on total wages have fallen differently on men and women, the latter being disproportionately affected.

        d. The crisis disproportionately affected lower-paid workers, thereby increasing wage inequalities. 

    2. Minimum wages and inequality

        a. The report shows that minimum wages, statutory or negotiated, exist in 90 per cent of the 187 ILO Member States.

        b. Globally, an estimated 327 million wage earners are paid at or below the applicable hourly minimum wage. This figure represents 19 per cent of all wage earners, and includes 152 million women. 

        c. The extent to which a minimum wage may reduce wage and income inequality depends on at least three key factors: the “effectiveness” of minimum wages, the level at which minimum wages are set, and the characteristics of minimum wage earners.

    3. Wage policies for a human-centered recovery

        a. Adequate and balanced wage policies, arrived at through strong and inclusive social dialogue, are needed to mitigate the impact of the crisis and support economic recovery.

        b. In planning for a new and better “normal” after the crisis, adequate minimum wages – statutory or negotiated – could help to ensure more social justice and less inequality.

    4. On Indian workers

        a. Indian workers have low average wages, & longer working hours.

        b. Workers in Asia and the Pacific enjoyed the highest real wage growth among all regions over the period 2006–19, with India leading the way along with other countries.

        c. While comparing average wage, the report has taken into account the National Floor Level Minimum Wage which is Rs.176/- per day.

        d. However, actual wages are far higher. If the median of the minimum wages in different states is drawn, it would be Rs.269/- per day in the country.

        e. The Code on Wages, 2019 which has been notified on 8th August, 2019 universalizes and creates a statutory right of minimum wages for all workers whether in organized or unorganised sector.

(The author is a trainer for Civil Services aspirants. The views expressed here are personal.)