Realist, not conformist analysis of the latest financial, business and political news

10% Of Global Workers Get 50% Of Pay – 20% Get Only 1%

This all sounds entirely logical and reasonable:

Nearly half of all global pay is scooped up by only 10% of workers, according to the International Labour Organization, while the lowest-paid 50% receive only 6.4%.

The lowest-paid 20% – about 650 million workers – get less than 1% of total pay, a figure that has barely moved in 13 years, ILO analysis found. It used labour income figures from 189 countries between 2004 and 2017, the latest available data.

A worker in the top 10% receives $7,445 a month (£5,866), while a worker in the bottom 10% gets only $22. The average pay of the bottom half of the world’s workers is $198 a month.

It’s from this report.

Ten per cent of workers receive 48.9 per cent of total global pay, while the lowest-paid 50 per cent of workers receive just 6.4 per cent, a new ILO dataset reveals.

What’s more, the lowest 20 per cent of income earners – around 650 million workers – earn less than 1 per cent of global labour income, a figure that has hardly changed in 13 years.

The new dataset shows that overall global labour income inequality has fallen since 2004. However, this is not due to reductions in inequality within countries – at the national level, pay inequality is actually increasing. Rather, it is because of increasing prosperity in large emerging economies, namely China and India. Overall, the findings say, income inequality remains pervasive in the world of work.

The explanation? To be in the top 10% of the global pay distribution you need to be making around and about minimum wage in one of the rich countries. Via another calculation route, perhaps median income in those rich countries. No, that £5,800 is the average of all the top 10%.

income by deciles globally

Note that this is in USD. About £2,000 a month puts you in the second decile, that’s about UK median income of 24,000 a year.

And as it happens about 20% of the people around the world are in one of the already rich countries. so, above median in a rich country and we’re there. Our definition of rich here not quite extending as far as all of the OECD countries even. Western Europe – plus offshoots like Oz and NZ -, North America, Japan, S Korea and, well, there’s not much else. Sure, it’s not exactly 10% of the people there but it’s not hugely off either.

So, what is it that these places have in common? They’ve been largely free market, largely capitalist, economies for more than a few decades. The most recent arrival, S Korea, only just managing that few decades. It is also true that nowhere that hasn’t been such is in that listing. It’s even true that nowhere that is such hasn’t made it – not that we’d go to the wall for that last insistence although it’s difficult to think of places that breach that condition.

Capitalism and free markets make the workers rich. Who knew?

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Leo Savantt
Leo Savantt
4 years ago

Who knew? Not the present front bench of Her Majesty’s Opposition that’s for sure.

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