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JAKARTA – In Asia, wages rose by an average of 3.5% last year, almost ten times faster than the 0.4% increase among the wealthiest members of the Group of 20 countries, whose leaders will meet in Argentina later this week.
Driven by Asian economies and China in particular, wages in emerging and developing economies of the G-20 – including Indonesia and India – have generally tripled over the past two decades. two decades since the Asian financial crisis, according to a new report by the International Labor Office. Organization.
The disparity between developed countries such as Japan – where wages fell by 0.4% last year – and less developed countries in Asia is partly explained by the much faster growth of emerging economies and a inflation is lower than that of other emerging or developing regions such as Africa. , Latin America, Eastern Europe or Middle East.
South Korea is a kind of anomaly: a rich Asian economy where wages have risen by 15% since 2008, a lead that places it ahead of Germany as a developed country with wage growth the faster of the decade.
"Reflecting faster economic growth than in other regions, workers in Asia and the Pacific experienced the highest real wage growth in all regions between 2006 and 17, with countries such as China, India, Thailand and Vietnam lead, "the ILO said.
Emerging Asian economies will provide 55% of global economic output by mid-century, according to a recent Credit Suisse estimate.
However, despite growing economies and wages in emerging and developing Asian markets, overall wages remain significantly higher in developed countries.
"Converting the average wages of all G-20 countries to US dollars using exchange rates of purchasing power parity (PPP) gives a simple average wage of about $ 3,250 per month." in advanced economies and about $ 1,550 per month in emerging economies, "said the ILO. .
And despite rapid wage growth in emerging economies, there are other differences in the labor markets of both developed and developing countries. While wage growth in the United States was only 1% last year, the country is moving towards full employment, with a percentage of unemployed at 3.8%.
According to the ILO, of the world's 3.3 billion workers, only 54 percent are salaried or salaried, although these figures represent an increase of more than 700 million compared to a quarter of a century ago. "In low-income and middle-income economies, about 50 percent of all employees continue to work in the informal economy, either in the informal sector or as informal workers in the formal sector," said the government. 39; ILO.
Although wages in developing and emerging Asia are growing much faster than elsewhere, wage growth in Asia last year was 1.3 percentage points lower than last year. that of 2016, while wages had risen by 4.8%, suggesting that uncertainties stem from a possible wider trade between China and the US the war was affecting the economies of the region.
Despite wage growth and the expansion of jobs in services and manufacturing in developing and emerging Asian countries, millions of people still work in the informal sector or in small businesses such as that this store located in Jakarta. (Photo by Simon Roughneen)
US President Donald Trump and Chinese President Xi Jinping, leaders of the world's two largest economies, are expected to meet at the G-20 summit in Argentina at the end of the week as part of what could be a last-ditch attempt. Prevent both sides from increasing their tariffs. on the whole of their bilateral trade.
China's extraordinary economic growth in recent decades catapulted the country to replace the United States as the world's largest economy – an influence that can be seen in global wage increases.
Last year, the overall global average of a 1.8% increase in wages would be brought down to 1.1% if China were removed from the equation and, in the ten years that Following the 2008 financial crisis, China's contribution to world wage growth has been close to half of the annual growth. in most years, wage increases, along with concerns over the impact of US tariffs, are shifting foreign manufacturing investment to cheaper neighbors, such as Vietnam and Cambodia.
While wage growth in Asia is expected to continue to outstrip that of other regions, the potentially destabilizing impact of robotics and automation on jobs in the manufacturing sector could eventually affect the labor markets of the region. the region.
"With the increasing automation and use of new technologies, the demand for better-trained and skilled workers is increasing, and it is also these workers who are earning better wages, which increases the disparity between low-skilled and low-skilled workers. highly qualified, "said Sameer Khatiwada. , Economist, Department of Economic Research and Regional Cooperation, Asian Development Bank.
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