Global wages falling this year despite indications of economic recovery, UN labour agency says

GENEVA - Real wages fell in the United States and some other wealthy nations in the second quarter of the year, raising questions about whether workers are sharing in any economic recovery, the U.N. labour agency said Tuesday.

The International Labor Organization said inflation-adjusted wage growth fell sharply around the world last year to 1.4 per cent, from 4.3 per cent in 2007. It said wages are falling in a number of countries so far this year.

"The picture on wages is likely to get worse in 2009, despite the beginning of a possible economic recovery," the 15-page report said.

The ILO analyzed data from 35 countries including Brazil, Britain, Japan, South Africa and Ukraine. It did not specify where wages have fallen the most or the least, and China and India, which provide large amounts of the world's workers, were excluded from the report because they did not provide data.

Monthly wages have fallen almost 2 per cent in the United States since January, said Patrick Belser, an ILO economist.

Manuela Tomei, ILO's employment chief, said wage declines were depriving national economies of much needed demand and were contributing to sapping consumer confidence.

"The continued deterioration of real wages worldwide raises serious questions about the true extent of an economic recovery, especially if government rescue packages are phased out too early," Tomei said.

The ILO noted some good efforts by governments to help workers, citing minimum wage increases above inflation in the United States, Brazil, Japan and Russia.

"In the U.S., there is a real policy toward strengthening the wage policies," Belser said, adding that Washington was trying to make it easier for workers to join unions.

"These measures can go a long way in addressing the imbalance that we found before the crisis, particularly with zero growth in the median wages in the U.S. for many years despite a booming economy," he said.