Wages have fallen by an average of 0.9% in the first half of this year, while prices are rising. This is the first time this century that this has happened, the International Labor Organization (ILO) said in a report on Wednesday.
According to the ILO, this is mainly due to the cost crisis. High inflation and a global slowdown in economic growth are leading to lower wages around the world. Low-income families are particularly affected.
The fall in wages varies from country to country. In the European Union, real – or inflation-adjusted – wages even fell by 2.4% in the first half of this year. In 2021, wages will still increase by 1.3%. Wages in Central and Western Asia, on the other hand, grew by 2.5%. That was less than a year ago, when it was still 12.4%.
According to the ILO, there is an urgent need for policy measures to improve the living standards of workers.
An increase in the minimum wage and a reduction in VAT on essential goods such as food could help, according to the ILO. The organization also suggests giving low-income families vouchers for the purchase of basic necessities.
