Wage growth in Asia outstrips other regions, say ILO's Malte Luebker, Senior Regional Wage Specialist for Asia, ILO
Well from an Asian perspective I think the Global Wage Reports shows quite a solid performance of wage growth outstripping most other regions… The headline statistics are about 5 per cent wage growth in 2011, slightly above that in the previous year, so that’s a very good outcome for Asia as such. However, much of that performance is actually due to China where wages have grown at slightly above 10 per cent for urban units in China. If you take out China from the analysis you find that wages in the rest of Asia have stagnated by and large. They are lower in 2011 than they were in 2007, before the economic crisis hit. So if you look at those figures you find a rather more disappointing picture and you understand why many workers are unhappy about wage trends and that you see labour unrest related to wage issues a cross the region in many countries nowadays” 59 s
Asia needs to re-think low-eage development model, says Sukti Dasgupta, the ILO’s head of Regional Economic and Social Analysis for Asia
Well this global wage report raises an important concern, which is about the model of development that Asia has followed, which is basically export driven and based on cheap labour. And this shows us that if wages have not grown in line with economic growth, where economic growth has been quite fantastic in Asia in the last few years, there has to be a change in the entire model of development, and the change has to be more in terms of aligning wages .
Wage Specialist Malte Luebker explains the impact on wages of the export-led growth model that is common in the region, and looks and the options for longer-term economic strategy.
Falling wage shares are drag on domestic demand, says Malte Luebker Senior Regional Wage Specialist for Asia, ILO
“Profit shares are going up across the world, wage shares are going down across the world, and that obviously has big implications for domestic demand. The money is not in the pockets of workers so countries lack internal demand and have to rely on exports to meet the demand shortfall. Now the problem there is that not all countries can have export surpluses at the same time so we find an unsustainable, unbalanced situation. And I think what’s important for Asian governments, and I think many countries have realized that, is that they need to rebalance away from a reliance on exports and strengthen domestic demand, and obviously wages one important element of that strategy”.
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