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World | Dec 3, 2020

ILO global wage report says low-paid workers and women most affected by COVID-19

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Large numbers of low-paid workers losing their jobs

Low-paid workers and women being disproportionately harder hit by COVID-19 through the loss of jobs and working hours were the main findings of a report published by the International Labour Organisation (ILO) on Wednesday (December 2).

The ILO’s Global Wage Report 2020/2021 found that the average wage in two-third countries of the countries surveyed fell or grew more slowly in the first six months of 2020 due to the global pandemic. 

In the remaining one-third countries including Brazil, Canada, France, Italy and the United States, the study showed an increase in average wages was the result of a large number of low-paid workers losing their jobs or leaving the labour market.

The report also found that not all workers were equally affected by the crisis. However, those in lower-skilled occupations lost more working hours than higher-paying managerial and professional jobs.

Using data from the group of 28 European countries, the ILO report pointed out that without temporary subsidies, the lowest-paid 50 per cent of workers would have lost an estimated 17.3 per cent of their wages.

Women worse affected than men

According to the data, the impact on women was worse than that on men. Estimates indicated that without wage subsidies, women would have lost 8.1 per cent of their wages in the second quarter of 2020 compared to 5.4 per cent for men. The ILO surmised that such a discrepancy was mainly caused by reduced working hours more than by the difference in the number of lay-offs.

The report stated that even before the onset of the global pandemic worldwide there were 266 million people or 15 per cent of all wage earners were earning less than the hourly minimum wage.

This was partly due to many countries excluded agricultural and domestic workers from their coverage and partly because of the large numbers of individuals working informally, where the labour rules are not enforced.

Women were over-represented among workers earning minimum wage or less. Interestingly, the sectors typically employing more women were among the worst hit by the global pandemic.

These sectors include leisure, tourism and hospitality. The report examined wage trends in 136 countries in the four years (2016-19) preceding the pandemic and found that global wage growth fluctuated between 1.6 and 2.2 per cent.

Countries where wages increase most

Wages increased most rapidly in Asia and the Pacific as well as Eastern Europe but increased slowly in North America and Northern, Southern and Western Europe.

In countries where strong measures were taken to preserve employment, the ILO report contended that the effects of the crisis were felt primarily, as falls in wages rather than massive job losses.

It pointed out that temporary wage subsidies put in place by governments have helped limit the rise in inequality. However, in 10 countries for which figures were available, the impact was offset by only 40 per cent of the total loss in wages.

Director-General of the International Labour Organisation (ILO), Guy Ryder. (Photo: International Geneva)

Commenting on the report, ILO Director-General Guy Ryder pointed to the growth in inequality created by the COVID-19 crisis, which he declared is threatening a legacy of poverty and social and economic instability that would be devastating. He said the recovery strategy must be human-centred.

“We need adequate wage policies that take into account the sustainability of jobs and enterprises, and also address inequalities and the need to sustain demand,” Ryder explained, noting that adequate and balanced wage policies are arrived at through strong and inclusive social dialogue.

This, he argued, is what is needed to mitigate the impact of the crisis and support economic recovery.

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