Wages of workers in most advanced economies have stagnated over the last two years, according to the International Labour Organisation (ILO).
The ILO’s Global Wage Report released last week shows that wages globally rose by 2% over 2013. And if China is taken out of the equation the rise is only 1.1%.
The average for the more developed economies was close to zero, with many suffering real wage declines. In Greece, Ireland, Italy, Japan, Spain and the United Kingdom average real wages in 2013 were below their 2007 level.
At the same time, though, productivity is increasing.
According to the report “overall, in the group of developed economies, real wage growth lagged behind labour productivity growth over the period 1999 to 2013.”
In other words over this 14-year period, the share of national income going to working people has declined, while the share of national income going to financiers and corporations - a tiny minority of the population – has steadily increased.
Policies adopted internationally after the Global Financial Crisis, including the austerity measures imposed on countries like Ireland, Italy, Spain and Greece have accelerated the trend.
The Abbott government is also trying to go down the wage reduction road – a strategy that can only lead to rising inequality and the dead end of falling consumer demand. That in turn brings lower levels of production and higher unemployment.