From
International Labour Organization
Global
Wage Report 2008 / 09
Minimum
wages and collective bargaining
Towards policy
coherence
Wage employment and wages are central to the world of work. Approximately half of
the global labour force works for a wage. Living standards and the livelihood of wage
earners and families depend on the level of wages, when and how they are adjusted
and paid. Wages are a major component of overall consumption and a key factor in the
economic performance of countries.
The enormous expansion of the labour force participating directly and indirectly
in the international exchange of goods and services and the growing interdependence of
low-, middle- and high-income countries has squarely placed wages at the centre of the
debate on globalization. It is the responsibility of the ILO to make available for public
use data on levels and trends in wages around the world. This report illustrates the wide
variety in recent wage trends across countries and regions, from very rapid increases in
a few countries to very modest growth in many others.
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Contents
Preface
Contents Acknowledgements
Introduction
Part I Major trends in wages, 1995–2007
1. The economic context
1.1. Strong economic growth, but a gloomy outlook
1.2. Continued global economic integration
International trade
Foreign direct investment
Labour migration
1.3 Inflation
2. Aggregate wages
2.1. Definitions and statistics
2.2. Average wages
Wages and productivity
Wage forecasts for 2008 and 2009
2.3. Changes in the wage share
3. The distribution of wages
3.1. Does wage inequality matter?
3.2. Trends in wage inequality
3.3. Wage inequality and economic development
3.4. Wage inequality and gender
Part II Minimum wages and collective bargaining
4. Recent trends
4.1. The revival of minimum wages
4.2. Contrasting developments in collective bargaining coverage
5. The effects of institutions on wage outcomes
5.1. Collective bargaining, productivity and wages
5.2. Institutions and wage inequality
5.3. Findings from the literature
6. Designing coherent wage policies
6.1. Using the minimum wage as an effective and decent wage floor
What is a decent wage floor?
Uprating minimum wages
Keeping it simple
Compliance, coverage and coherence
6.2. Promoting collective bargaining alongside minimum wages
Promoting a coordinated approach
Examples of measures to activate collective bargaining
Monitoring collective bargaining and collecting wage statistics
Part III Summary and conclusions
7. Main findings and policy implications
8. Emerging issues and the way forward
Technical appendix I: The wage share
Technical appendix II: Institutions and inequality.
References
Statistical appendix
Tables
1. Share of wage
and salaried workers (% of total employment)
2. Trends in
minimum wages
3. Collective
bargaining coverage, 2007 or latest year
4. National and
sectoral minimum wages (% of total countries)
5. Minimum wages
and domestic workers (selected countries)
Figures
1. Economic growth:
Annual changes in GDP, 1980–2007
2. Economic growth
and stability: Comparing the periods of 1980–94 and 1995–2007
3. Trade (imports +
exports) as a percentage of GDP, 1980–2006
4. Net inward infl
ows of FDI as a percentage of GDP, 1980–2006
5. Infl ation: GDP
defl ators, 1980-2006 (annual changes, %)
6. Food prices: A.
Food price index, 2000–08; B. Outlook for cereal prices,
1996–2017
7. Real wage growth
8. GDP per capita
growth and change in real wages
9. Level of GDP per
capita and level of wages (purchasing power parity, PPP)
10. Comparative
estimates of global wage elasticity
11. Relationship
between changes in consumer price index (CPI)
and nominal wages, 1995–2007
12. Poorest
households’ expenditure on food
(latest years when data were available, percentage of total
expenditure)
13. Trends in wage
share: Differences between the periods 1995-2000 (average)
and 2001–07 (average); A. adjusted wage share; B. unadjusted
wage share
14. Wage
inequality, D9/D1 ratio:
Differences between the periods 1995–97 and 2004–06
15. Growing
inequality in different types: An illustration
16. Decomposition
of wage inequality in selected countries:
Changes in D9/D5 and D5/D1 (1995–2000 and 2001–06)
17. Wage inequality
and economic development, 2006/latest years:
A. Gini index (overall wage inequality); B. D9/D1 ratio
18. Changes in
gender pay gap, 1995–2007
19. GDP per capita
change and real wage growth in countries with lower coverage
of collective bargaining (≤ 30%)
20. GDP per capita
change and real wage growth in countries with higher coverage
of collective bargaining (>30%)
21. Wage
differentials (D9/D1) and collective bargaining rate (2005), EU countries
22. Minimum wages
relative to average wages
23. Nominal minimum
wages and infl ation in Latin America, 1996–2007
Boxes
1. The ILO’s
October Inquiry
2. China: Trends in
collective bargaining
3. Uruguay:
Reactivating collective bargaining and wage policy
4. Cambodia: The
minimum wage as a foundation for collective bargaining
Technical appendix tables
A1. Panel
regression results on the change in wage share
A2. Wage inequality
and institutional factors
Statistical appendix tables
A1. Average wages
and the “wage share”
A2. Minimum wages
A3. Inequality
A4. Background
indicators
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