Wage inequality in the workplace

International Labour Organization report 2016-2017

A substantial gap in real wage trajectories has opened up over the last ten years between France and Germany on the one hand, and Italy and the United Kingdom on the other hand

Among developed G20 countries, real average wages since 2006 have increased most rapidly in the Republic of Korea, where they rose by 12 per cent, followed by Australia (10 per cent), Canada (9 per cent), Germany (7 per cent), France (6 per cent) and the United States (5 per cent). Meanwhile, in Japan, Italy and the United Kingdom, real wages declined (by 2, 6 and 7 per cent, respectively). Thus, among European countries a substantial gap in real wage trajectories has opened up over the last ten years between, for example, France and Germany on the one hand, and Italy and the United Kingdom on the other hand.

wage inequality increased in US, UK and Germany while it has decreased in Sweden, France and Switzerland

It is a well-established fact that during recent decades wage inequality has increased in many countries around the world, including two-thirds of OECD countries as well as some of the large emerging economies (see e.g. OECD, 2008 and 2011a). While some level of inequality reflects differences in workers’ individual and productive characteristics, growing concern has been expressed about the adverse social and economic consequences of excessive inequality, which can lead to weaker social cohesion, reduced household consumption.
A common measure of income inequality is the threshold ratio D9/D1, which measures the distance between the upper bound of the lowest-paid 10 per cent and the lower bound of the highest-paid 10 per cent of wage earners. This ratio has changed for OECD countries since around the turn of the century. The left-hand panel displays countries where wage inequality has increased since the early 2000s, with the largest increases in Ireland, Norway, the Republic of Korea and the United States. On the right-hand side we see countries where wage inequality has decreased, with the sharpest falls in Chile, Estonia, Hungary and Portugal.

 

Source ILO: http://www.ilo.org/global/research/global-reports/global-wage-report/2016/WCMS_537846/lang–en/index.htm