Covid-19’s impact on wages only just starting: ILO

Global pressure on wages from COVID-19 will not stop with the arrival of a vaccine, the head of the International Labour Organization (ILO) warned on Wednesday.

The warning coincided with a major report showing how the pandemic had slowed or reversed a trend of rising wages across the world, hitting women workers and the low-paid hardest.

Except for China, which was bouncing back remarkably quickly, most of the world would take a considerable period of time to get back to where it was before the pandemic, which had dealt an “extraordinary blow” to the world of work almost overnight, reports UN News.

“The aftermath is going to be long-lasting and there is a great deal, I think, of turbulence and uncertainty,” Ryder said.

“We’ve to face up to the reality, at least a strong likelihood that … as wage subsidies and government interventions are reduced, as they will be over time, that we are likely to face continued downward pressure on wages.”

Cruel revelation
Ryder said the pandemic had revealed the structural vulnerabilities, precariousness, that is baked into the current world of work in a ruthless way.

“We need to take the opportunity but we do have to extract from it, the types of opportunities that allow us to think about some of the fundamentals of the global economy and how we can, in the bounce-back process, make it function better.”

The Global Wage Report showed how the pandemic has put pressure on wages, widening the gap between top earners and low-wage workers, with women and the low-paid bearing the brunt.

After four years when wages grew on average, by 0.4-0.9 per cent annually in advanced G20 economies and 3.5-4.5 per cent in emerging G20 economies, wage growth slowed or reversed in two-thirds of countries for which recent data was available.

But the figures only reflect wages for those who have jobs, and in some countries, such as the US, so many low-paid workers had lost their jobs that average wages appeared to have risen, a misleading picture.

The damage could have been worse if governments and central banks had not stepped in to dissuade companies from laying off workers during the pandemic lockdowns, the ILO report said. It said such measures had allowed millions of wage earners to retain all or part of their incomes, in contrast to the impact of the global financial crisis a decade ago.

But for economies to start returning towards sustained and balanced growth, incomes and aggregate demand would need to be supported and enterprises would have to remain successful and sustainable.

“Constructive social dialogue will be key to success in achieving this goal,” the ILO report said.

(Source: UNB)