Nearly half of all global pay is scooped up by only 10% of workers, according to the International Labour Organization, while the lowest-paid 50% receive only 6.4%. The lowest-paid 20% – about 650 million workers – get less than 1% of total pay, a figure that has barely moved in 13 years, ILO analysis found. It used labour income figures from 189 countries between 2004 and 2017, the latest available data. A worker in the top 10% receives $7,445 a month (£5,866), while a worker in the bottom 10% gets only $22. The average pay of the bottom half of the world’s workers is $198 a month. Roger Gomis, an economist in the ILO statistics department, said, “The majority of the global workforce endures strikingly low pay and for many having a job does not mean having enough to live on. The poorest 10% would need to work more than three centuries to earn the same as the richest 10% do in one year.”
The share of global pay received by the top 10% has actually fallen since 2004, from 55.5% to 48.9%. But within some countries, pay inequality is increasing, in particular in the UK. In the UK, much of the bottom 50% have suffered the largest losses of income between 2004 and 2017, while the increases for the top earners are much more pronounced than in the US or Germany, the report said. Inequality between countries has fallen, as growing prosperity in China and India has brought them closer to higher-income countries. However, this has not trickled down to the poorest in either country. The report said, “Even if global pay inequality levels are very high, they have experienced a substantial reduction between 2004 and 2017. However, excluding India and China, the results point to a much slower reduction in labour income inequality. Interestingly, this does not indicate that in India or China inequality has decreased, indeed neither country registered a decline in inequality in the 2004-2017 span.”
Poorer countries tend to have much higher levels of pay inequality than richer nations. In sub-Saharan Africa, the bottom 50% of workers receive only 3.3% of total pay, compared with the European Union, where the same group receives 22.9% of the total income paid to workers. The countries with the most pay inequality are DR Congo, Côte d’Ivoire, Liberia, Niger and Uganda, according to the report. The ILO said that in several high-income countries, including the UK, US and Germany, there were substantial losses in earnings for the middle and lower-middle class over the 13-year period and large gains for the top. The share of pay going to the middle class – the middle 60% of workers – declined during this period, from 44.8% to 43%. At the same time, the share paid to the top 20% of earners increased, from 51.3% to 53.5%.
Countries, where the top earners’ share of national pay rose by at least one percentage point, include Germany, Indonesia, Italy, Pakistan, the UK and the US. “The data show that in relative terms, increases in the top labour incomes are associated with losses for everyone else, with both middle-class and lower-income workers seeing their share of income decline,” said Steven Kapsos, Head of Data Production and Analysis at the ILO. “However, when the labour income shares of the middle- or lower-income workers increase, the gains tend to be widespread, favouring everyone except the top earners.” Rising inequality in Britain means it could join the US in becoming one of the most unequal nations on earth, according to the Nobel-prize winning economist, Sir Angus Deaton. He is leading a landmark review of inequality in the UK amid fears that the country is at a tipping point. The US is ranked on some measures among the most unequal of major nations. Pay for non-college-educated men has not risen for five decades.
Credit: Julia Kollewe for The Guardian, 4 July 2019.