Caw conference decent wage decent work working ourselves out of poverty
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CAW Conference Decent Wage, Decent Work: Working ourselves out of poverty. Economic Crisis: Confronting wage deficits in the Asian Decent Work Decade Silvia Cormaci Associate Expert Gender Equality and Migration ILO Bangkok Bangkok, Thailand 28 April 2010. Issues for Discussion.

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CAW Conference Decent Wage, Decent Work: Working ourselves out of poverty

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Caw conference decent wage decent work working ourselves out of poverty

CAW ConferenceDecent Wage, Decent Work: Working ourselves out of poverty

Economic Crisis: Confronting wage deficits in the Asian Decent WorkDecade

Silvia Cormaci

Associate Expert Gender Equality and Migration

ILO Bangkok

Bangkok, Thailand

28 April 2010


Issues for discussion

Issues for Discussion

  • Global and regional wage trends

  • Impact of global economic crisis on wages

  • Gender dimension

  • Suggestions to promote decent wages and work


Trends in wages 1995 2007

Trends in Wages (1995-2007)

Globally:

  • Low wage growth: average 1.9%/year.

    But regional variations: Asia 1.7% (China: 10%; Japan: 0%)

  • Wages lag behind GDP per capita: growth in real wages increased at slower rate than productivity

  • Growing Income inequality: top-bottom wages gap (e.g. China, Thailand); gender pay gap (GPG)- Asia


Trends in wages 2008 09 global context

Trends in wages 2008/09: global context

Global economic crisis => wage growth in 2008 fell sharply & dropped even further in 2009

  • 2008: more than a quarter of countries experienced flat or falling monthly wages in real terms (USA, Taiwan, China, Hong Kong, Japan)

  • 2009: despite beginning of economic recovery, in Q1 2009 real wages fell in more than half of the 35 countries for which recent data is available

  • However: considerable variation in the behaviour of wages across countries (positive wage growth /deep wage cuts)

  • The wage share of GDP typically increased between 0 -5 % in 2008/09, irrespective of the size of GDP growth or decline (temporary phenomenon?)

    Source: ILO Global Wage Report 2008/09


Trends in wages 2008 09 asia

Trends in wages 2008/09: Asia

ASIA : The case of Japan

Sharp fall in wages in Q1 2009 and flat wages in Q2.

This occurs in the context of a long period of deflation and flat wages

Similarly in the Republic of Korea, sharp fall in wages in Q1 & Q2 2009 mostly due to cuts in overtime work & in quarterly bonuses


Trends in wages 2008 09 concerns

Trends in wages 2008/09: concerns

  • downward trend in wages raises questions about the ability of workers and their families to sustain consumption, especially if government rescue packages are phased out too early

  • impact of the crisis: wage-arrears have increased


Gender impact of the crisis

Gender Impact of the crisis

Data on average wages by sex collected for 22 countries, 2008 =>

Crisis has impacted women at least as much as men:

(GPG has frozen with women earning about 80 % of men’s wage)

BUT

In the majority of countries worldwide, women’s wages represent on average between 70 -90% of men’s wages (much lower ratios in Asia)


Gpg in east asia

GPG in East Asia

The overall gender pay gap (GPG) in East Asia is pronounced: Women’s income amounts to:

  • less than or just 1/2 of men’s income in Japan, Malaysia, Korea and Singapore

  • around 60% of men’s income in Hong Kong SAR, the Philippines and Thailand

  • around two-thirds of men’s income in China and Vietnam.

Ratio of estimated overall female to male earned income*

Source: UNDP. Human Development Report 2005


Gpg manufacturing wages in east asia

GPG: Manufacturing wages in East Asia

  • The GPG is pronounced across the region:

    Women’s wages as % of men’s:

    • Over 70%: Philippines, Thailand

    • Below 65%: Hong Kong, Malaysia, Singapore

    • Below 60%: Japan, Korea

F/M Ratio of Wages in Manufacturing, 1993/2003

*As in source (specification of year not given)

Note: Data on China and Vietnam are not available

Source: United Nations (2005). The World’s Women 2005.


Ilo response to the crisis

ILO response to the crisis

In June 2009, ILO Member States adopted the Global Jobs Pact in which they agreed to strengthen:

  • social dialogue

  • collective bargaining

  • minimum wages (MW)

    …..to avoid wage deflation & enhance social protection


Minimum wages trends

Minimum wages: trends

Globally:

  • 2001/07: MW back on the agenda of many countries (+ 5.7%/year)

  • 2008: trend to increased minimum wages in real terms (by more than inflation figures)

    Asia:

  • NO MW in some countries (e.g. Malaysia, Myanmar, Pacific Islands)

  • Crisis: MW decreased in Thailand & Cambodia

  • Philippines & Vietnam improving MW system with ILO assistance


Minimum wages

Minimum wages:

Important policy tool for social protection, can reduce wage inequality & GPG, but requires:

  • Involvement of social partners in setting the level

  • Avoid using MW as substitute for collective bargaining

  • Income support measures or tax reduction, especially for most vulnerable workers

  • Extend coverage to vulnerable groups (e.g. Domestic workers)

  • Credible enforcement mechanisms (labour inspectors, social partners)


Decent wages decent work

Decent wages & decent work ….

Possible measures:

  • Introduce fair MW mechanism (increase MW to protect purchasing power of vulnerable workers)

  • Reduce the GPG

  • Promote wage negotiation, collective bargaining & social dialogue

  • Closing the gap between productivity and wages (+ productivity= + wages)


Caw conference decent wage decent work working ourselves out of poverty

THANK YOU!

[email protected]

www.ilo.org

www.ilo.org/public/english/protection/condtrav/wages/index.htm


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