India Sees Wage Growth, But Records Highest Gender Wage Gap: ILO
Despite seeing the highest average real wage growth in South Asia during 2008–17, India recorded the highest gender wage gap at 34 per cent, according to the Global Wage Report 2018/19.
Here are key takeaways from the report:
- In 2017, overall, the real wages just grew with 1.8 per cent globally (136 countries).
- Also, 2017 saw the global wage growth falling to its lowest rate since 2008, according to a new International Labour Organisation (ILO) report.
- While positive wage growth happened in Saudi Arabia, India and Indonesia, Brazil saw a negative growth in 2015-16.
India recorded the highest average real wage growth in South Asia during the period 2008-2017.
- The study noted that several countries recently undertook measures to strengthen their minimum wage. The countries, the report reads, are working towards providing more adequate labour protection.
- Workers in Asia and the Pacific enjoyed the highest real wage growth over the period 2006-17. Countries such as India, China, Thailand and Viet Nam have been top leaders in this department.
Coming to South Asia, India led the average real wage growth at 5.5 against a regional median of 3.7.
- Nepal (4.7), Sri Lanka (4), Bangladesh (3.4), Pakistan (1.8) and Iran (0.4) are right behind India in growth.
- The report said all emerging G20 countries, except Mexico, experienced a positive growth in average real wages in 2008-2017.
- While South Africa announced the introduction of a national minimum wage this year, lawmakers in India “are working on the possibility of extending legal coverage of the current minimum wage from workers in scheduled occupations to all wage employees in the country”, the report noted.
- Surprisingly, wages grew higher and faster in less well-off countries last year than in richer nations. However, salaries are still far too low in the developing countries. During the last year, pay rose by just 0.4 per cent in advanced economies, whereas it grew at over 4 per cent in the developing world.
Measuring the gender pay gap
- Globally, women have been at the receiving end as they continue to be paid about 20 per cent less than men.
- The report noted that the gender pay gap is wider at the high end of the pay scale in high-income countries. On the other hand, the gender gap is wider amongst lower paid workers in low- and middle-income countries.
- “In many countries, women are more highly educated than men but earn lower wages, even when they work in the same occupational categories,” said Rosalia Vazquez-Alvarez, econometrician and wage specialist at the ILO and one of the authors of the report.
- The report pointed out that motherhood is another factor weighing in on the gender pay gap. Research shows that mothers tend to have lower wages compared to non-mothers. This finding may be related to a number of factors, including labour market interruptions, reductions in working time, or stereotypical promotion decisions.
- However, the report brings evidences which show that there is already a pay gap even before women reach motherhood.
In India, when it comes to hourly wages, women are paid the most unequally. On average, women are paid 34 per cent less than men in the country. This gap is the highest among 73 countries studied in the report.
- The report revealed that the gender wage gap is visible even with women with higher levels of education and that “emphasis needs to be placed on ensuring equal pay for women and men”.
Bangladesh is the only country in the world, where the hourly wage gender pay gap is positive.
- The inequality trend holds true around the world as well. On an average, hourly wages of women are 16 per cent less than those of men. Also, with a gap of 22 per cent, inequality is higher in monthly wages as well.
- It’s important to note that this gender wage gap has remained unchanged at 20 per cent from 2016 to 2017.
It’s crucial to understand that even though the average wage growth is increasing, the gender gap remains a primary issue. While wages in developing countries are increasing more quickly compared to developed economies, the gender gaps are still big. The report findings definitely raise an alarm suggesting a need to fight stereotypes and discrimination at the point of entry level itself, especially when it comes to India.