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Global Wage Report 2020-21: Wages and minimum wages in the time of COVID-19

International Labour Organization

2020

Global

Report/Paper

Workplace Gender Equality

Gender equality Gender pay gap covid-19 Wages Wage differential Minimum wage Wage policy

Global Wage Report 2020-21: Wages and minimum wages in the time of COVID-19

Global Wage Report 2020-21: Wages and minimum wages in the time of COVID-19

This International Labor Organization (ILO) flagship report examines the evolution of real wages around the world, giving a unique picture of wage trends globally and by region. The 2020-21 edition analyses the relationship of minimum wages and inequality, as well as the wage impacts of the COVID-19 crisis.

This report also reviews minimum wage systems across the world and identifies the conditions under which minimum wages can reduce inequality. It presents comprehensive data on levels of minimum wages, their effectiveness, and the number and characteristics of workers paid at or below the minimum. The report highlights how adequate minimum wages, statutory or negotiated, can play a key role in a human-centred recovery from the crisis.

Some Insights

  • Globally, an estimated 327 million wage earners are paid at or below the minimum wage. This figure represents 19% of all wage earners and includes 152 million women.
  • Due to the COVID-19 crisis, two-thirds of the countries with available data experienced a downward pressure on the level or growth rate of average wages. Other countries exhibited an artificial increase in average wages as a reflection of the substantial job losses among lower-paid workers.
  • The impacts of the crisis on total wages have fallen differently on men and women, the latter being disproportionately affected.
  • The crisis disproportionately affected lower-paid workers, thereby increasing wage inequalities.
  • Out of the estimated 327 million wage earners who are paid at or below the minimum wage, 266 million wage earners around the world earn less than existing hourly minimum wages, either because they are not legally covered or because of non-compliance.
  • The groups most frequently excluded from legal coverage of minimum wage systems are agricultural workers and domestic workers.
  • One of the most significant indicators of non-compliance is a high incidence of informality. If minimum wages are to be effective, they need to be accompanied by measures to encourage formalization.
  • Women are generally over-represented among low-paid workers and the literature shows that, in many cases, minimum wages can narrow pay gaps between men and women. In all regions, the proportion of women among those earning the minimum wage or less is larger than their share among those earning more than the minimum wage.
  • A woman employee in informal employment earns on average 47% of the average monthly wage of a man in formal employment, whereas a man in informal wage employment earns 66% of the wage of a formally employed man, and a woman in formal employment is paid on average 79% of her male counterpart’s wage.
  • The average monthly wages of informally employed women workers are lowest, compared to those of men in formal wage employment, in developing countries.
  • In planning for a new and better “normal” after the crisis, adequate minimum wages – statutory or negotiated – could help to ensure more social justice and less inequality. To be most effective, minimum wages must be accompanied by other policy measures that support the formalization of the informal economy, the creation of paid employment and the growth of productivity among sustainable enterprises.

For a more comprehensive discussion of these points, among other insights, download the report from the ILO website.

 

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