Warning of fall in real wages from 'multiple global crises'

A slowdown in economic growth at a time of rising inflation, driven in part by the war in Ukraine and the global energy crisis, has triggered a striking fall in real monthly wages in many countries.

A report from the International Labour Organisation said on Wednesday that the crisis is reducing the purchasing power of the middle classes and hitting low-income households particularly hard.

Manuela Tomei, the body's assistant director-general for governance, rights and dialogue; and Rosalia Vazquez-Alvarez, an ILO econometrician and wage specialist, presented the annual wage findings at a press briefing.

ILO sees uneven recovery in global labour market

In advanced Group of 20 countries, real wages in the first half of 2022 are estimated to have declined to minus 2.2 per cent.

Meanwhile, real wages in emerging G20 countries grew by 0.8 per cent, 2.6 per cent less than in 2019, the year before the Covid-19 pandemic.

“The multiple global crises we are facing have led to a decline in real wages. It has placed tens of millions of workers in a dire situation as they face increasing uncertainties,” said ILO Director-General Gilbert Houngbo.

“Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained.

“In addition, a much-needed post pandemic recovery could be put at risk. This could fuel further social unrest across the world and undermine the goal of achieving prosperity and peace for all.”

Last year, the ILO warned of the disparity of the response to the pandemic and the long-run scarring that could result.

It said vaccination delays around the world could cut working hours by 4.6 per cent, or the equivalent of 130 million full-time jobs, compared with the fourth quarter of 2019.

An optimistic scenario forecasts a 1.3 per cent decline if the pandemic is controlled and consumer and business confidence continue to improve.

“The signs of recovery we see are encouraging but they are fragile and highly uncertain, and we must remember that no country or group can recover alone,” said former ILO director-general Guy Ryder.

The tentative signs of a labour market recovery come after the pandemic shut workplaces, forcing many to work from home. The slowdown affected incomes, led to job losses and pushed millions into poverty.

The ILO is promoting a Global Accelerator that aims to galvanise the creation of 400 million jobs, including in the green, digital and care economies, and the extension of adequate social protection to the four billion people currently without coverage.

This would support a shift to a proactive approach to managing economic, social and environmental crises, and the just transition required to tackle climate change.

Guy Ryder speaks at the World Government Summit in Dubai. Victor Besa / The National

Its 2021 analysis, “Covid-19 and the world of work”, said that the Covid-19 pandemic is set to cut working hours by 3 per cent, the equivalent of 90 million full-time jobs, compared with pre-pandemic levels.

The lowdown

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UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

On Women's Day

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The National Editorial: Is there much to celebrate on International Women's Day 2021?

Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'

Tearful appearance

Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.

Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.

She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.

A spokesman said her upset demeanour was due to a personal matter.

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UAE currency: the story behind the money in your pockets

What can victims do?

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Warn others to prevent further harm

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Sole survivors

Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.