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The International Labor Organization recently released a report suggesting that real wage growth in developed economies is nearly unchanged. Real wage measure includes the effects of inflation. Developing economies are mainly responsible for world wage growth. The ILO report says world wage growth is below the three percent rate that existed before the economic crisis of 2008. It says wage growth has slowed to nearly zero percent in developed economies over the last two years. However, in developing economies, like China and other Asian nations, wages have growing by six percent. Wage growth in Eastern Europe and Central Asia is almost as high. The ILO report says wages in rich nations are still about three times higher than in poor countries. It says workers in developed countries earn $3,000 a month on average, compared to $1,000 a month for developing nations. The report says developed nations had increased inequality because of job losses and big differences between the highest and lowest wage earners. That difference between highest and lowest wage earners decreased in some developing countries. The ILO says minimum wage policies, rules for the lowest permitted wages, can play a strong part in dealing with poverty and inequality. Sandra Polaski is the Deputy Director-General for Policy at the ILO. She disagrees with conservative critics of minimum wage policies. They say higher minimum wages mean fewer jobs. However, Ms. Polaski says employers often find ways to increase productivity to make up for the added cost of wages.
