27 Nov : Current global financial crisis is going to have an adverse impact on the pockets of the working class with salaries of millions of people employed around the world expected to be slashed in the next fiscal, according to a new UN report.
"With a slowdown in growth and volatile food and energy prices dampening the real wages of many workers, both poor and middle class, difficult times lie ahead for the world’s 1.5 billion wage-earners," Juan Somavia, Director-General of United Nations International Labour Office (ILO) said.
Tensions could intensify over the pay cuts, the "Global Wage Report 2008/2009 warned, with salaries expected to decline in many countries, including major economies.
The ILO forecasts that real wage growth will reach 1.1 per cent at best next year, with growth in industrialised countries predicted to drop from a slight rise of 0.8 per cent this year to a fall of 0.5 per cent in 2009.
The wage downturn comes on the heels of a decade where salaries did not keep pace with economic growth, the agency said.Between 1995 and 2007, wages only rose 0.75 per cent for every 1 per cent of annual GDP growth per capita.
The report also pointed out that the gap between the highest and lowest wages has shot up in more than two-thirds of countries surveyed, in many cases reaching socially unsustainable levels.
Germany, Poland and the United States are among the countries where the disparity between the top and bottom incomes has widened the most.Pointing that the gap in salaries between men and women is still large and narrowing very slowly, the ILO reported that in most nations surveyed, women’s pay averages between 70 and 90 per cent of that of men, but much lower ratios were not uncommon in places such as Asia.