Ten per
cent of workers receive 48.9 per cent of total global pay, while the
lowest-paid 50 per cent of workers receive just 6.4 per cent, a new ILO dataset
reveals.
What’s more, the lowest 20 per cent of income earners – around 650 million
workers – earn less than 1 per cent of global labour income, a figure that has
hardly changed in 13 years.
The new dataset shows that overall global labour income inequality has fallen
since 2004. However, this is not due to reductions in inequality within
countries – at the national level, pay inequality is actually increasing.
Rather, it is because of increasing prosperity in large emerging economies,
namely China and India. Overall, the findings say, income inequality remains
pervasive in the world of work.
The Labour Income Share and Distribution
dataset , developed by the ILO Department of Statistics, contains data from 189
countries and is drawn from the world’s largest collection of harmonized labour
force survey data. It offers two new indicators for major trends in the world
of work, at national, regional and global levels. One provides the first
internationally comparable figures of the share of GDP that goes to workers –
rather than capital – through wages and earnings. The second looks at how
labour income is distributed.
The Key Findings show that, globally, the share of national
income going to workers is falling, from 53.7 per cent in 2004 to 51.4 per cent
in 2017.
Looking at
the average pay distribution across countries, it finds that the share going to
the middle class (the middle 60 per cent of workers) declined between 2004 and
2017, from 44.8 per cent to 43 per cent. At the same time, the share earned by
the top 20 per cent of earners increased, from 51.3 per cent to 53.5 per cent.
Countries where these top earners saw their share of national pay rise by at
least one percentage point include Germany, Indonesia, Italy, Pakistan, the
United Kingdom and the United States.
“The data show that in relative terms, increases in the top labour incomes are
associated with losses for everyone else, with both middle class and
lower-income workers seeing their share of income decline,” said Steven Kapsos,
Head of the ILO’s Data Production and Analysis Unit. “However, when the labour
income shares of the middle or lower income workers increase, the gains tend to
be widespread, favouring everyone except the top earners.”
Poorer countries tend to have much higher levels of pay inequality, something
that exacerbates the hardships of vulnerable populations. In Sub-Saharan
Africa, the bottom 50 per cent of workers earn only 3.3 per cent of labour
income, compared to the European Union, where the same group receives 22.9 per
cent of the total income paid to workers.
Roger Gomis, Economist in the ILO Department of Statistics, said: “The majority
of the global workforce endures strikingly low pay and for many having a job
does not mean having enough to live on. The average pay of the bottom half of
the world’s workers is just 198 dollars per month and the poorest 10 per cent
would need to work more than three centuries to earn the same as the richest 10
per cent do in one year.”
The release of the new dataset follows a recommendation in the report of the ILO Global Commission on the Future
of Work ,
which highlighted the need for new indicators to more accurately track progress
on well-being, environmental sustainability, equality and a human-centred
development agenda. The new dataset will also be used to monitor progress
towards the United Nations’ Sustainable
Development Goals (SDGs).