“The impacts of the crisis on total wages have fallen differently on men and women, the latter being disproportionately affected.”
“The crisis disproportionately affected lower-paid workers, thereby increasing wage inequalities”
Global Wage Report, 2020-21 by ILO
The world has been profoundly affected by the COVID-19 pandemic. It has affected physical and mental health of millions of people.
Due to the pandemic, social and economic activity worldwide has been disrupted. It has also threatened livelihoods and well-being of millions of people worldwide.
ILO, or the International Labor Organization, is a United Nations agency whose mandate is to advance social and economic justice through setting international labor standards. In the Global Wage Report, it analyses the impact that the Covid pandemic has had on jobs in the world.
According to the ILO, the equivalent of 345 million full-time
jobs were lost in the third quarter of 2020.
- In the four years preceding the COVID-19 pandemic (2016–19), global wage growth fluctuated between between 0.9 and 1.6 per cent (when China is excluded from the sample).
- In the first half of 2020, as a result of the COVID-19 crisis, a downward pressure on the level or growth rate of average wages was observed in two thirds of the countries for which recent data are available
- In other countries average wages increased, but that is a reflection of the substantial job losses among lower-paid workers.
- The impacts of the crisis on total wages have fallen differently on men and women, the latter being disproportionately affected.
- The crisis disproportionately affected lower-paid workers, thereby increasing wage inequalities
Importance of wage subsidies
The report stated that the lowest-paid 50% of workers would have lost 17.3% of wages without wage subsidies, in comparison to 6.5% of all workers in selected European countries.
Estimates found 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.
Reduction in wages
Around 266 million people (15 per cent of all wage earners) were earning less than the hourly minimum wage even before the onset of the COVID-19 pandemic. The situation has only been exacerbated during the pandemic.
Women were over-represented among workers earning minimum wage or less because sectors such as leisure, tourism and hospitality, which were among the worst hit by the pandemic, typically employ more women.
In planning for a new and better “normal” after the crisis, adequate minimum wages — statutory or negotiated — could help to ensure more social justice and less inequality.
As the report suggests, along with taking other economic measures, it is imperative that governments ensure payment of minimum wages to the workers. It will not just prevent social gaps from widening but will also assist countries in speedier economic recovery.
Komal is an English literature student with a keen interest in economic developments and politics amongst others. She is a part of Research & Content team at HrNxt.com