Ten percent of workers receive 48.9 per cent of total global pay, while the lowest-paid 50 percent of workers receive just 6.4 percent, a new International Labour Organization (ILO) dataset reveals.
What’s more, the lowest 20 percent of income earners – around 650 million workers – earn less than 1 percent of global labour income, a figure that has hardly changed in 13 years.
The new dataset shows that overall global labour income inequality has fallen since 2004. However, this is not due to reductions in inequality within countries – at the national level, pay inequality is actually increasing. Rather, it is because of increasing prosperity in large emerging economies, namely China and India. Overall, the findings say, income inequality remains pervasive in the world of work.
The Labour Income Share and Distribution dataset, developed by the ILO Department of Statistics, contains data from 189 countries and is drawn from the world’s largest collection of harmonized labour force survey data. It offers two new indicators for major trends in the world of work, at national, regional and global levels. One provides the first internationally comparable figures of the share of GDP that goes to workers – rather than capital – through wages and earnings. The second looks at how labour income is distributed.
The Key Findings show that, globally, the share of national income going to workers is falling, from 53.7 percent in 2004 to 51.4 percent in 2017.
Looking at the average pay distribution across countries, it finds that the share going to the middle class (the middle 60 percent of workers) declined between 2004 and 2017, from 44.8 percent to 43 percent. At the same time, the share earned by the top 20 percent of earners increased, from 51.3 percent to 53.5 percent. Countries where these top earners saw their share of national pay rise by at least one percentage point include Germany, Indonesia, Italy, Pakistan, the United Kingdom and the United States.
“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 the ILO’s Data Production and Analysis Unit. “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.”
Poorer countries tend to have much higher levels of pay inequality, something that exacerbates the hardships of vulnerable populations. In Sub-Saharan Africa, the bottom 50 percent of workers earn only 3.3 percent of labour income, compared to the European Union, where the same group receives 22.9 percent of the total income paid to workers.
Roger Gomis, Economist in the ILO Department of Statistics, 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 average pay of the bottom half of the world’s workers is just 198 dollars per month and the poorest 10 percent would need to work more than three centuries to earn the same as the richest 10 percent do in one year.”