The International Labour Organization (ILO) has reported that there is a decrease in the global labour income share, which is the percentage of total global income received by workers. This decline in income is contributing to increasing inequality and will have a disproportionate effect on working people, according to Celeste Drake, Deputy Director-General of the ILO.
In their latest World Employment and Social Outlook report, the ILO stated that there has been a decline in total income globally by 0.6 percentage points between 2019 and 2022, and this trend has continued since then. This seemingly small decrease in income equates to an annual shortfall of $2.4 trillion and is consistent with a longer-term decline of 1.6% between 2004 and 2024.
The ILO also highlighted that almost 40% of this decline occurred during the three years of the COVID-19 pandemic, from 2020 to 2022. They further noted that while production output has increased over the last two decades, income has not kept pace.
Steven Kapsos, Head of the Data Production and Analysis Unit at the ILO, stated that although there has been a 58% increase in workers’ output per hour globally from 2004 to 2024, income has only increased by 53%. This five percentage point difference is contributing to the decline in the labour income share.
The ILO warned that without intervention from governments, advancements in AI could further decrease workers’ pay. To combat this trend, the ILO recommends that countries implement policies to reduce inequalities, such as providing universal social protection and a decent minimum wage. They also urge governments to support freedom of association and collective bargaining to allow workers and employers to negotiate how to share productivity gains.
The ILO’s report also revealed that the level of youth unemployment globally has only slightly decreased from 21.3% in 2015 to 20.4% in 2021. Arab States have the highest percentage of young workers unable to find a job, followed by Africa, Asia and the Pacific, Latin America and the Caribbean, Europe and Central Asia, and Northern America.
Furthermore, female youth unemployment remains more than double that of men’s. The ILO stresses the importance of reducing these inequalities and achieving the Sustainable Development Goals (SDGs) by 2030. They recommend implementing policies to provide universal social protection and a decent minimum wage, as well as promoting freedom of association and collective bargaining.