ILO Highlights Need for Policy Focus on Wage Inequality and Regional Disparities

Global Wage Report 2024-25: Wage Growth Resumes Amid Decreasing Inequality, but Regional Gaps Persist.

Real wage growth is rebounding in Spain and globally as inflation slows, according to the Global Wage Report 2024-25: Is wage inequality decreasing globally? presented on January 16 by the International Labour Organization (ILO). The report, introduced by Rosalía Vázquez, an economist at the ILO in Geneva, and Félix Peinado, director of the ILO office for Spain, sheds light on progress and challenges in addressing wage inequality.

Since the early 2000s, Spain has seen a gradual reduction in wage inequality, with a 0.6% annual average decrease. While real wages have grown moderately—ranging from 0.2% to 0.6%—for most salaried workers, the highest earners have experienced a decline of 0.2% to 1.2%.

Spain’s real average wage grew by 1.4% in 2023, with an estimated 0.6% growth in 2024. Although this reflects recovery from the -3.5% drop in 2022, the 2024 growth rate is 0.3 percentage points lower than the G20 advanced economy average.

Globally, emerging G20 economies like those in Asia and the Pacific and Central and Western Asia have experienced more robust wage growth than advanced economies. For example, while advanced G20 economies recorded real wage declines of -2.8% in 2022 and -0.5% in 2023, emerging economies saw consistent gains, including a 6.0% growth in 2023.

Regional Disparities in Focus

Wage growth patterns across regions reveal persistent disparities:

• European Union: Real wages fell by 0.1% in 2023 but are projected to grow by 2.7% in 2024.
• Asia and Pacific, Central and Western Asia, and Eastern Europe: These regions reported stronger wage growth compared to others.

The uneven recovery highlights the need for targeted policies to bridge these regional gaps.

Policy Implications and Call to Action

"The return to real wage growth in Spain, and globally, is a positive development," said Félix Peinado Castillo, director of the ILO office in Madrid. "These figures should inspire us to strengthen wage policies through social dialogue, boost labor productivity, and improve the standard of living for workers, especially those most affected by the cost-of-living crisis."

The report calls for:

• Strengthened Social Dialogue: Foster collaboration between governments, employers, and workers to develop equitable wage policies.
• Labor Productivity Growth: Enhance productivity to support sustainable wage increases.
• Focused Support for Vulnerable Workers: Address the needs of low-income earners disproportionately impacted by inflation.

Media and Public Engagement

The report's findings have resonated widely, gaining attention across digital platforms, print media, and broadcast outlets. Discussions during the press conference emphasized the importance of aligning wage growth with inflation control and tackling inequality through global and regional strategies.

A Path Forward

The ILO’s findings underline the need for concerted efforts to ensure wage growth benefits all workers, especially in regions lagging behind. By addressing these disparities, nations can build a more equitable and sustainable economic future.