Wednesday, November 17, 2010
Execituve Summary of DLI
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The income is increasingly falling, if yesterday's earnings of a worker can meet the very basic need for a family with a member of 4 people, today's income can not sustain the basic needs even if only for one, workers' own self. Wages have fallen in value very low and poor. Wages only become a tool for workers can “only” survive, but living without quality, living squid growth, because of low wages have forces workers to live in a poor and underdeveloped.
Wage growth is always in the back of rising prices and economic growth. When a country's economic growth and rising prices of basic commodities are also competing to rise, labor costs fell in the lowest position and ability to buy directly sprawl and no power anymore. Worse yet, if wage increases every year or once every two years, while rising prices of basic commodities regardless of the time and place, anywhere and anytime, at the market price could go up at any time arbitrarily depending on supply and demand in the market . In fact, in Asia and the Pacific, when GDP per capital grew by an extra 1 percentage point, average wages increased by an extra 0.68 per cent. This so-called wage elasticity of 0.68 indicates the possibility that real wage growth lagged behind labour productivity. This estimated elasticity is also lower than the global estimate of 0.75. 1
Equitable wages also failed. The high GDP of a country does not mean the worker's income is also high. The problem lies in the wage gap between the lowest and highest wages is very high, could even reach 5000 per cent. This trend has been observed both industrialized countries (e.g., Japan and the Republic of Korea) and developing countries (e.g., China, the Philippines, Indonesia and Thailand). Yet this is not unique to the region but commonly found across the regions. Globally, it is found that a 1% annual growth of GDP has been associated with a 0.05% decrease in the wage share. Asia and the Pacific had once been praised for equitable growth where sustained growth was successfully combined with lower inequality. However, this is not the case any longer. The Global Wage Report shows that, while the overall share of GDP taken by workers as a whole decreased, the division of this smaller share between individual workers has also become more unequal. Wage inequality increased in most countries in the region. The increases were particularly sizable in China, the Republic of Korea, and Thailand. Globally, inequality between top wages and bottom wages has increased in more than two thirds of the countries.
Globally, the pay gap between genders is still high and closing only very slowly. Although about majority of the countries for which have seen an increase in the ratio of female to male average wages, the size of change is small and in some cases negligible. In a majority of countries, women’s wages represent on average between 50% and 60% of men’s wages.
1 Global Wage Report 2008/9, Regional focus – Asia and the Pacific
This post was written by: Franklin Manuel
Franklin Manuel is a professional blogger, web designer and front end web developer. Follow him on Twitter
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