Wages are recovering after negative shift in 2022, says UN labour agency

“If this trend is confirmed, it will be the largest gain in more than 15 years… however, this positive trend is not shared equally across regions,” said ILO Director-General Gilbert Houngbo.

Speaking in Geneva at the launch of ILO’s Global Wage Report, Mr. Houngbo noted that today’s global wage gains reflect a notable recovery compared with the 0.9 per cent decline in 2022, when high inflation – and higher prices – outpaced wage growth.

The trend for bigger pay packets is less marked in highly-industrialized economies, however, where wages “grew modestly” by 0.9 per cent last year, the ILO chief said. This contrasts with a bumper near-six per cent wage increase in emerging economies in 2023 after a 1.8 per cent rise in 2022 – a positive trend that has continued in 2024.

Despite this welcome development, prices remain too high for low-income households who have continued to struggle with the rising cost of living. “Inflation – albeit reduced – remains a harsh reality in many emerging and developing countries,” the UN labour agency chief noted.

Regional trends

From a regional viewpoint, average wages increased faster in Asia and the Pacific, Central and Western Asia, and Eastern Europe, compared to the rest of the world.

In 2022, Africa, Asia and the Pacific, and Central and Western Asia were the only regions that witnessed increases in average wages in 2022, while average real wages decreased in all other regions. Declines ranged from minus 0.8 per cent in Eastern Europe to minus 3.7 per cent in Northern, Southern and Western Europe, ILO said.

In 2023, wage growth was positive in most regions, with the exception of Africa, Northern America, and Northern, Southern and Western Europe.

In 2024 – except for African and Arab States, where average real wages remained stable – wages grew in all regions in 2024, with increases ranging from 17.9 per cent in Central and Western Asia, to 0.3 per cent in Northern America.