You are on page 1of 30

GLOBAL WAGE REPORT 2008/9

The ILO’s first global wage report is published to discuss the major trends in the level and
distribution of wages around the world. It also reviews the roles of minimum wages and
collective bargaining and explores how to develop a coherence policy in the area of wages.
This note summarizes its key findings and policy implications, focusing on the region of
Asia and the Pacific.

Overall, despite the positive wage growth in the region, there is an indication that wage
growth lagged behind economic and productivity growth. Inequality has also been on the
rise, without much progress in gender pay gap. Low coverage of collective bargaining
remains a challenge, and the current minimum wage system leaves much room for
improvements in many countries in the region. The outlook for 2008-9 is not bright,
particularly in the wake of global economic downturn. Tensions on wages are likely to
intensify, and the workplace may become more vulnerable to disputes. A coherent policy
approach to wages is essential and wage policies need to be complemented by effective
income support measures.

WAGE TRENDS

Sound economic growth until 2007. Recovering from the financial crisis of the late 1990s,
Asia and the Pacific, with a strong influence of China, had been a driving force of
globalization and witnessed relatively solid global economic growth until 2007. With this
economic achievement, the share of wage employment increased considerably, although
the ratio is still below the global average of 46.9 per cent. In East Asia, wage employment
was estimated to increase from 32.4 per cent in 1996 to 42.6 per cent in 2006.

Wages grew but tended to lag behind economic growth. This economic growth was
accompanied by positive growth in real wages in the region. Between 2001-2007, real
wages in Asia and the Pacific were estimated to growth at 2.9 per cent per year, while the
estimated global average stand at 3.2 per cent (the global median average was 1.9 per cent).
This overall average performance of the region in wage growth needs to be seen in
comparison to economic growth. In fact, in Asia and the Pacific, when GDP per capita
grew by an extra 1 percentage point, average wages increased by an extra 0.68 per cent.
This so-called wage elasticity of 0.68 indicates the possibility that real wage growth lagged
behind labour productivity. This estimated elasticity is also lower than the global estimate
of 0.75.

Wage share also fell. In line with relatively slow wage growth, there has been a downward
trend in the share of GDP distributed to wages, or the wage share. This trend has been

observed both industrialized countries (e.g., Japan and the Republic of Korea) and
developing countries (e.g., China, the Philippines, and Thailand). Yet this is not unique to
the region but commonly found across the regions. Globally, it is found that a 1% annual
growth of GDP has been associated with a 0.05% decrease in the wage share.

The trend in wage inequality reversed and increased. Asia and the Pacific had once been
praised for equitable growth where sustained growth was successfully combined with lower
inequality. However, this is not the case any longer. The Global Wage Report shows that,
while the overall share of GDP taken by workers as a whole decreased, the division of this
smaller share between individual workers has also become more unequal. Wage inequality
increased in most countries in the region for which data are available. The increases were
particularly sizable in China, the Republic of Korea, and Thailand. ** Globally, inequality
between top wages and bottom wages has increased in more than two thirds of the
countries considered in the report.

Gender pay gap has narrowed down, but too little. Globally, the pay gap between genders
is still high and closing only very slowly. Although about 80% of the countries for which
data are available have seen an increase in the ratio of female to male average wages, the
size of change is small and in some cases negligible. In a majority of countries, women’s
wages represent on average between 70% and 90% of men’s wages, but it is not
uncommon to find much lower ratios (50-60 %) in some parts of the world, particularly in
Asia.

MINIMUM WAGES AND COLLECTIVE BARGAINING

Collective bargaining on wages remains limited. Collective bargaining coverage in Asia
and the Pacific remains very low. The overwhelm majority of countries in the region has
coverage rate lower than 15% so that the impact of collective bargaining on wages is very
limited. This may explain why wage elasticity for Asia and the Pacific is lower than the
global estimate. In fact, the Global Wage Report finds that higher coverage of collective
bargaining is associated with higher wage elasticity (or stronger relationship between wage
increases and economic growth) and lower wage inequality. For instance, in “high
coverage” countries (defined as coverage above 30% of employees), the wage elasticity is
estimated at 0.87, while it is much lower at 0.65 for countries with lower coverage.

Minimum wages gained more importance. Partly reflecting the relative weakness of
collective bargaining in the region, increasing importance has been attached to minimum
wages, especially in the context of sluggish wage growth and widening inequality. Its role
in protecting low-paid workers and alleviating poverty is well recognized. Globally, it is
estimated that, over the period of 2001-2007, minimum wages in real terms were raised by
an average of 5.7 per cent per year. This strong growth is also the case in Asia and the

Pacific as a whole, but country variations are quite considerable. Some countries such as
China and Viet Nam have witnessed minimum wages (in real terms) growing at higher than
8 per cent per year, whereas minimum wages fell in other countries such as Thailand. In
some other cases such as India and Pakistan, minimum wage system has not worked as
intended.

However, there are also challenges for minimum wages. Minimum wages have also
attracted much debate involving conflicting views. The government and the social partners
have been struggling to agree on the level of minimum wages (e.g., Indonesia and Viet
Nam), and there are also concerns about the possibility that minimum wages are used as a
substitute for collective bargaining (e.g., the Philippines). In other countries such as India,
the main concern, particularly for trade unions, has been how to revitalize the allegedly
ineffective minimum wage system. The complexity of the minimum wages system which
sets up a complicated list of minimum wages for sector, occupation and region, has often
proved counterproductive as well. At the same time, a growing body of literature shows
that the adverse impact of minimum wages on employment (which is a prevalent concern
in Asia and the Pacific) has been exaggerated. Overall, in many countries in the region, the
current minimum wage system leaves much room for improvements.

Therefore, coherent policy design is essential. Good practices related to the design of a
complementary and coherent set of minimum wages and collective bargaining policies
include: 1) keeping the minimum wage simple and opting, whenever possible, for a
national minimum wage instead of complex sectoral and/or occupational minimum wages;
2) Trying to ensure that social benefits are, whenever possible, disconnected from the
minimum wage level – since this practice often prevents governments from increasing
minimum wages for fear of the adverse impact on social security budgets; 3) accompanying
minimum wages by credible enforcement mechanisms which involve labour inspectors as
well as social partners; and 4) extend the coverage to include vulnerable groups such as
domestic workers, who are often excluded from the protection of minimum wage laws.
This is particularly important in order to maximise the impact of minimum wages on
gender equality at the bottom of the pay ladder.

OUTLOOK

The outlook is not bright. Given the current global economic turmoil which is expected to
continue for years to come, the Global Wage Report expects that very difficult times lie
ahead for many workers in the region. Based on IMF’s recent downward revision to
economic forecasts for 2008-9, it is predicted that, in the region of Asia and the Pacific, the
average wage growth in real term is unlikely to exceed 1.8 per cent, with the possibility of
wage reduction in countries with low economic growth. This estimate is slightly lower than
the global estimate of 2.1 per cent. In addition, higher prices, although being alleviated in

wages. prices and the characteristics of wage-earners (sex. the recent decline in the wage share also tends to be accompanied by the weakened capacity of translating economic growth into more jobs. 135. levels of productivity and the level of employment. TRENDS AND RECENT DEVELOPMENTS IN TCF . including income. skill levels.recent months. This criterion also includes the capacity to pay as indicated in Starr (1993). Criterion 2: the general level of wages in the country. the levels of minimum wages should be increased wherever possible to protect the most vulnerable workers. Criterion 3: the cost of living and changes therein. particularly for low-paid workers. Secondly. and Criterion 6: economic factors. whatever its form. or groups of factors. and the workplace may become more vulnerable to wage-related disputes compounded by the pressure of employment reductions. They are: Criterion 1: the needs of workers and their families. minimum wages and wage bargaining should be complemented by public intervention through income support measures. social partners should be encouraged to negotiate ways to prevent a further deterioration in the share of wages relative to the share of profits in GDP. Criterion 4: social security benefits. to be taken into account in determining the level of minimum wages. Six criteria. What can be done? Firstly. Criterion 5: the relative living standards of other social groups. like food subsidy and cash transfer. reliable and timely statistics on a variety of data items. cannot work unless it is based on regular. occupation. are set forth in Recommendation No. Interestingly. tensions are likely to intensify over wages. remain a threat to erode real wages. MINIMUM WAGE DETERMINATION A system of minimum wages. including the requirements of economic development. Therefore. etc). Thirdly.

as a “one-world employer”. THE CHANGING STRUCTURE OF PRODUCTION AND TRADE PRODUCTION TRENDS World output of textiles has always been much greater in US dollar terms than world output of clothing – which in turn has been much greater than world output of footwear. The ratios were therefore respectively 8. In 1995 world textile output was 24 per cent higher. rose by 27 per cent between 1985 and 1990 and registered a slight rise between 1990 and 1995. in US dollar terms. accordingly.The textiles. World output of textiles in 1980 was US$418 billion.6 to 5. In 1995 world textile output amounted to US$517 billion. and world footwear output to US$60 billion. WORLD PRODUCTION OF TCF INDUSTRIES More significant than the change in total output over the 1980-95 period was the change in the distribution of output between regions. is highly influenced by the changing characteristics of international competitiveness and the relocation strategies implemented by global companies.6 to 1. TCF industries can be regarded. Between 1980 and 1995 the textile output of . world clothing output to US$336 billion. which is expanding more rapidly than the average of the manufacturing sector. global in so far as trade. Output fell between 1980 and 1985. and global because the geographical distribution of world employment is affected by the rapid changes in production and trade. clothing and footwear (TCF) industries are global. global inasmuch as production activities are worldwide and connected through various arrangements and strategic decisions to serve the world market. than in 1980.

4 per cent. Since China did not devaluate the yuan during the 1995-98 period – and China dominates the textile output of Asia – the fall in the value of Asian textile output was lower than it might have been.Asia rose by 97. estimated at some US$485 billion (no data were available for Africa and Oceania.6 per cent in 1998. During the same period Europe’s share remained unchanged (about 29 per cent). followed by clothing with 38.5 per cent of the world output of textiles in 1998 (figure 1.6 per cent in 1995 to 41. following a slight increase of 1. In 1998.6 per cent and footwear with 5. and that of the Americas by 76. This decline was one of the consequences of the Asian financial crisis.3 per cent in the 1990-95 period. From 1995 to 1998. Asia. World output of textiles continued to be dominant among the three sectors in the second part of the 1990s.3 per cent. saw its share in the world total decline from 43.5 per cent.7 per cent. which together account for about 2 per cent of world textile output). there was a fall in the value of production (in US dollar) of 6. WORLD EXPORTS OF TEXTILES AND CLOTHING LONG TERM TRENDS IN EMPLOYMENT . This decline was mainly due to a fall in the value of production in Asia of more than 10 per cent during the period in question. But European output fell by 32. The share of the Americas rose from 18 per cent to 25 per cent during that period. it accounted for 55. by 1995 Europe’s share had fallen to 29 per cent and Asia’s share had risen to 44 per cent. while the Americas increased its share. to reach some 29. Whereas in 1980 European output represented 53 per cent of world output and Asian output 27 per cent. which dominates the world production of textiles.9 per cent of the total value of output of the three sectors.2 per cent. and of substantial falls in the value of a number of Asian currencies.

8 to 1.3 million.6 0.9 America 1 355 1 247 –8. The ratios were 9.0 16. making a total of 29.5 100.0 7.6 Asia 11 627 11 914 17.8 19.2 –19. This represented an increase of 7.9 –2.7 million. clothing employment 11. In 1998 world textile employment was estimated to be 16.0 100.4 million.2 2.4 Total 16 849 16 434 0.6 to 5. due to a dramatic increase in clothing employment during this period.5 2.6 to 1 for the value of world output in 1995.5 69.9 –14.6 Oceania 65 62 12.8 million.0 72.2 million and footwear employment 1. WORLD EMPLOYMENT IN TCF INDUSTRIES WORLD EMPLOYMENT IN TEXTILES 1995-98.7 million.1 –4.5 Europe 3 207 2 733 –30.7 3. and footwear employment 1.8 million.3 to 4.1 –8. BY REGION Countries in: (in ‘000) % changes % share in total 1995 1998 1990-95 1995-98 1995 1998 Africa 595 478 –1. These are comparable with the ratios of 8. clothing employment 8.0 8. respectively.4 0.3 per cent between 1995 and 1998.THE CHANGING WORLD DISTRIBUTION OF EMPLOYMENT In 1995 world textile employment was 16.0 .

0 100.4 Asia* 3 895 6 976 –1.3 Oceania 47 .8 12 Mexico 240.1 4 United States 588.2 28.9 100.0 13 Turkey 227. –18.5 - Total 8 704 11 222 –16. China 159. 0.0 15 Brazil 188.9 20 Germany 141.4 5.0 8 Italy 341.0 7 Japan 432.2 .3 21.1* 44.5 12.4 19 United Kingdom 146.8 .8 5.0 TWENTY PRINCIPLE WORLD EMPLOYERS IN TEXTILES.7* 62.2 –12.5 11 Korea. Republic of 248.1 9 Pakistan 279.1 Americas 1 531 1 283 –11.2 17.5 3 Bangladesh 679.4 17 Romania 159.5 14 Egypt 223.4 79.0 18 Spain 151.6 11.0 5 Indonesia 515. BY REGION Countries in: (in '000) % changes % shares in total 1995 1998 1990-95 1995-98 1995 1998 Africa 507 570 12.4 6 Russian Federation 495.6 10 Thailand 257.1 –16.4 2 India 1 470. 1998 Ranking Countries Employees ('000) 1 China 7 672.2* Europe 2 724 2 393 –35.2 31.0 16 Taiwan. WORLD EMPLOYMENT IN CLOTHING 1995-98.

the estimated average proportion of labour costs in total production costs – excluding the value of raw materials – is about 60 per cent in the production of clothing and up to 40 per cent in textiles. COMPARISON OF LABOUR COST IN TEXTILE INDUSTRY . At the level of world regions. In the European Union. Within the regions. On the other hand. on account of the greater skills requested for the production of textiles and the higher value added of production per employee (higher labour productivity).LABOUR COST IN TEXTILE INDUSTRY Labour costs in the textile industry are generally higher than those in clothing and footwear production. In 1998. Workers are paid higher wages. in capital-intensive textile production. the average hourly labour cost in European countries (around US$15) was more than double the level of countries in Asia and three times that of countries in America. average hourly labour costs in the textile industry are substantially different. the proportion of labour costs in total manufacturing costs is lower than in clothing and footwear. labour costs are considerably higher in industrialized than in developing countries and countries in transition. for example.

The contrast is particularly obvious between Japan (with a labour cost per hour of more than US$20) and the rest of Asia where the average labour cost is around US$3. It is also .5.

Kenya. Republic of Korea). Denmark with US$23. China. Bulgaria and the Russian Federation. also varied from region to region and from country to country during the period under review. Even within developed countries belonging to the same economic bloc. after Spain and Greece.50 and US$1 per hour – for example. European Union labour costs in the textile industry in 1998 were lowest in Portugal at US$4. to develop new and higher quality products and to apply more efficient marketing techniques. 1995 . with increases of 150 per cent and 120 per cent. while Asian labour costs increased most during the 1990-98.marked between Western European countries (with an average of US$17) and Central and Eastern European Countries (with an average of US$1. their products continue to be competitive on world markets – a result of permanent efforts to rationalize and modernize production processes. Among those countries within the lowest labour costs. At the opposite end. It is also interesting to note that some newly industrialized countries also entered the list of those within the highest labour costs (Taiwan. The evolution of labour costs in textiles. AVERAGE HOURLY WAGES IN THE TCF INDUSTRY. available data reveal that several were below the level of US$0. Africa and Asia.5 per hour (Trinidad and Tobago. A number of European industrialized countries were also among those with labour costs of between US$0. India. A larger group of countries had hourly labour costs of between US$1 and US$2 – although the clear majority were developing countries from Latin America. including the application of the newest technologies. Pakistan and Sri Lanka). respectively. Europe experienced its highest labour cost increases between 1985 and 1990. Madagascar followed by Bangladesh. It is interesting to note that labour costs in the United States did not increase by more than 25 per cent over the period. the situation remains contrasted.51 per hour. where labour costs in 1998 were almost four times as high as in 1980. in terms of US dollars. The highest increases in hourly labour costs over the 1980-98 period were registered in Asian countries. In spite of the relatively high labour costs in many industrialized countries. European and African countries followed.10 per hour recorded the highest labour cost.8).

where the rise was clearly more marked than in Europe. the highest wage increases in textiles were recorded in Asian countries. and for only about one-ninth of the European level in African countries. This is due mainly to the higher skills of textile workers in the capital-intensive process. As far as average hourly wages on a world level are concerned. It is interesting to note that wages in European countries increased in spite of continuously shrinking employment. for 40 per cent of the European average in Asian countries.As a general rule. they accounted for two- thirds of the European level in the Americas. wages in the textile industry are generally the highest in European countries. where the responsibility – and the productivity – of the average worker managing technologically advanced machinery is higher than in the other sectors. In 1995. wages in the textile industry tend to be higher than those in clothing and footwear. During the 1980-95 period. while in Asia the number of employees increased rapidly. During the same period. the lowest increase in hourly textile wages was reported for African countries and the countries .

In Asia.50. in 1995. Latin American countries. the hourly wage in Japan. Canada and New Zealand. The highest differences were recorded for some countries in Asia and in Mexico. by 1995. . In the clothing industries of the various world regions in 1995. with an average of only US$1. the structure of labour costs is also reflected in hourly wages. the latter on account of their transition to market economies. Estonia.45 in the other countries for which data were available. at the top of wage levels ranging from some US$8 to US$16 or more per hour.64 in the Central and Eastern European Countries. where female wages per hour still accounted for only some 50 per cent of men’s wages in 1995. hourly wages increased most in Central and Eastern European Countries such as the Czech Republic.85 against only US$0. based on national currencies. The Americas and the Asian countries were at 63 and 62 per cent of the European level. due to their conversion into market economies and their confrontation with world competition.38. together with other industrialized countries such as Japan. compared with an average of US$2.01. The difference was smaller in some other Asian countries and in African countries. in most countries the differences had tended to shrink over the years. China. despite continuous losses in clothing employment over that period in the latter. Egypt. wages in Central and Eastern European Countries such as Bulgaria and Romania had dropped from higher levels prevailing until 1990. Among the countries with the lowest hourly wages were Bangladesh. India. The European countries were. with US$7. and European countries (some 150 per cent). and African countries.50 or less per hour. with wage levels at US$0.of Central and Eastern Europe. the highest wage increases were experienced by Asian countries (some 160 per cent). The difference in the Americas was lower. In Europe. and was lowest in European countries where women’s wages were at an average level of some 80 per cent of men’s wages. From 1980 to 1995. the hourly wages differed widely between European countries. the one factor that all countries in the world regions had in common was that women were paid a lower average wage per hour than men. The lowest hourly wages in the textile industry were paid mainly in Asian and Central and Eastern European Countries.86 in Latin America. the United States. It has to be noted that. at US$9. Comparing individual countries. Other countries which experienced such high wage increases included Israel. Again. Recent developments in textile wages show an upward trend in all countries for which data are available. Pakistan. with an average of US$6.50 for 1995. Western European countries were at an average of US$9. Between 1995 and 1997. some republics of the former USSR and Turkey. (165 per cent). African and South and Latin American countries reported wages slightly higher than US$0. not surprisingly. however. In 1995. Hungary and Latvia – all by more than 30 per cent.23 in North America and US$3. respectively. industrialized countries within the regions had much higher wage levels in 1995 than developing countries. Mexico and Mauritius. Devaluation of currencies vis-à-vis the US dollar played a part in the changes over time in several countries.

AVERAGE HOURLY WEEKLY HOURS IN THE TCF INDUSTRIES. it appears that wages in textiles are lower than in manufacturing and that wages in clothing tend to be lower than those in textiles and footwear. particularly in a number of developing countries.50).81). on account of substantial changes to their economic systems during this period. sometimes up to about 50 per cent.male wages remained higher than female wages. China. Japan followed with US$9.However. In 1995. Portugal and Slovenia. It is well known that – especially in developing countries – an important part of the clothing assembly process is performed in very small entities and by homeworkers. Looking at individual countries. Only countries in Central and Eastern Europe registered a decline in wage levels. and Canada (US$6.64. the smallest differences were registered in Europe. Furthermore. reported the highest wage among Asian countries (US$3. If part of the explanation of this wage differential relates to technological factors. If average hourly wage levels are compared with each other within the TCF industries and with manufacturing as a whole. Hong Kong. Available statistics only cover registered enterprises where working conditions in general – and wages in particular – are much better than those in small enterprises in the informal sector.40. In all the world regions. the wage gap between rich and poor countries would appear wider and there would be a better understanding of some outsourcing and relocation strategies based on the relative cost of labour. the statistical analysis gives only a limited image of the reality. an exception being the United States where wage increases were higher in clothing (94 per cent) than in textiles (75 per cent). which was higher than wages in European countries such as Latvia. as explained before. HOURS OF WORK: FROM STATISTICAL EVIDENCE OF REALITY There are two kinds of working time which may be examined in the TCF context: the statutory framework of regular working hours and the number of hours effectively worked per week. 1985-95 . whether they are industrialized or developing countries. with female wages reaching some 80 to 90 per cent of men’s hourly wages. the highest wages were once again reported by Western European countries. If wages paid to homeworkers and to workers employed in the informal sector were integrated in official statistics. This is a reality in most countries providing disaggregated statistical information on wages in the TCF industries. and only then the United States at US$7. it is clear that the growing international competition in the clothing industry has maintained wages at a low level worldwide. with US$10 or more per hour in 1995. the rise in wages was generally lower in clothing than in textiles.

This was above the average level of 43. Asian and American countries and increased in Oceania. respectively. In 1995.In the textile industry. amounting to 50 and 44 hours. while it remained almost unchanged in Europe. The reporting countries of the Americas. the average number of working hours decreased in the observed African. at 38 hours. while European countries experienced the lowest average weekly working time. the amount of hours actually worked per week by a worker (excluding overtime) tended to be higher in developing countries than in industrialized countries.5 hours per week for all countries for which information was available. Other countries reporting high levels of . African and Asian countries had the highest number of average working hours per week in textile production. During the 1985-95 period. Data available for individual countries in 1995 showed the highest number of working hours per week in Egypt (58 hours per week) followed by the Republic of Korea (51 hours). Australia and New Zealand had an average level of about 40 hours.

5 hours.5 hours). Denmark had an average weekly working time of around 31 hours. Finland. Most of the countries for which data were available reported an average number of 37-42 working hours per week in textile production. Between 1995 and 1997. Already during the 1980s. Over the 1985-95 period. The countries with the lowest average weekly working time were concentrated in Europe. substantial changes in the average weekly working time occurred with major declines in a number of developing countries. Peru and Argentina (46- 47 hours). Greece and New Zealand. Costa Rica (48 hours). In 1995. including some Central and Eastern European and newly industrialized countries. . the reduction was largest in Canada. More recently. followed by Slovakia (32. Belgium and Austria (some 33 hours each). Estonia reported the lowest number with 31. the actual amount of weekly hours of work has decreased mainly in industrialized countries.working hours were Singapore (49 hours).

The resultant adverse effects are likely to have negative implications for gross domestic product (GDP) growth. Even if Beijing throws in another hundred billion dollars. that China's stimulus program of $586 billion — which. many inside and outside China are pinning their hopes for global recovery on the Chinese countryside. greater problem with the strategy of making rural demand a substitute for export markets. although robust until now. The export growth rate has slowed in recent times. is much larger proportionally than the Obama administration's $787 billion package--is working. could be adversely affected in the near future: the number of job seekers leaving in January and February 2009 halved compared with the same period of 2008. particularly during the October 2008 to January 2009 period. 20th May 09 -Although China's GDP growth rate fell to 6. labour markets and consequently the attainment of poverty alleviation targets and the Millennium Development Goals (MDGs) by Bangladesh. These indicators are proof. The government is allocating 20 billion yuan ($3 billion) in subsidies to help rural residents buy televisions. Some countries (such as Malaysia) have revoked earlier job contracts and yet others have stopped issuing new visas (Saudi Arabia. refrigerators. There is another.BANGLADESH The global financial crisis has already started to have a negative impact on the increasingly globalising economy of Bangladesh. the stimulus package is not likely to counteract in any significant way the depressive impact of a 25- . in relation to GDP. some say . Countryside as Launching Pad for Recovery? With China's export-oriented urban coastal areas suffering from the collapse of global demand. Depreciation of currencies by competing countries ranging from 6% to 30% over the past one year and their stimulus packages that provide wide-ranging incentives to export-oriented sectors have led to erosion of Bangladesh’s competitive strength in the global market in recent times. Remittance earnings. Yet allocating funds to boost rural demand will fail to reverse China’s long-standing subordination of the poor to export-oriented industrialization. A significant portion of Beijing's stimulus package is destined for infrastructure and social spending in the rural areas. CHINA Beijing's heavy rural investment has led commentators to see hope for global recovery in the Chinese countryside.1% in the first quarter — the lowest in almost a decade — optimists see "shoots of recovery" in a 30% surge in urban fixed-asset investment and a jump in industrial output in March. and other electrical appliance. United Arab Emirates – UAE).

with a particular focus on the unemployed and internal migrants. The signing of a Memorandum of Understanding between the Ministry of Labour and Social Security and the ILO in 2001 marked a new direction in the relationship. A report from the Chinese Academy of Social Sciences indicated that in 1978 urban income was 2. so did discrepancies between different sectors. effective labour market institutions and labour laws. A more significant gap emerged between different occupations and industrial sectors. as wage levels increased. shaping the ILO’s work in the country. . In general. four times higher than the figure for 1995 (statistics: Average monthly wage in urban areas 1978-2007). The average wage in urban areas in 2006 was 1. Since then there have been significant changes in what is now the world’s fourth largest economy and China’s once centrally-controlled labour market is giving way to a market-oriented system. It defined a framework for cooperation. In 2006. The gap between urban and rural incomes also grew. a quarter of the average wage of those working in financial services (3. foreign- owned and state-owned enterprises.730 yuan). shortly after the start of the country’s reform process. The DWCP has four priority areas: • Promoting employment and employability. and one-fifth of those working in the computer industry (3. based on China’s national priorities and the ILO’s Decent Work Agenda. the average wage of those employed in primary industries was only 786 yuan. • Promoting fundamental labour principles and workers’ rights. types of ownership and regions. In addition. and reducing inequalities . However. • Extending and improving social protection. These reforms have created a number of challenges. the needs of vulnerable groups – particularly those who face difficulty finding work . The ILO’s China country office was opened in Beijing in 1984. These include rising unemployment (it’s estimated that more than 10 million jobs need to be created each year). was agreed.750 yuan a month. Subsequently a Decent Work Country Programme (DWCP). and were lowest in locally funded enterprises. The implications for the global economy are considerable.273 yuan). • Promoting better labour-management relations. average monthly wages were higher in share-holding.year policy of sacrificing the countryside for export-oriented urban-based industrial growth. widening income inequalities. AVERAGE MONTHLY WAGES Average monthly wages have increased every year in China since the late 1980s. and especially between low-skilled and highly-skilled workers (statistics: Monthly average wages by sector 2006-2007).57 times that of rural income. with wages in enterprises owned by Hong Kong and Taiwanese businesses in the middle (statistics: Average monthly wages by types of ownership 2006-2007). efforts need to be made to assist rural migrant workers seeking jobs in urban areas.and the need to develop high- skilled workers.

that gap had expanded to 3.2 percent year on year. These workers worked between 84 to 98 hours a week on a regular basis. In order to earn sufficient money. THE MINIMUM WAGES The provisions recommend that local and regional minimum wages should be set at about 40 to 60 percent of average monthly wages. Heilongjiang and Xinjiang. In July 2007.but by 2005. In major cities. such as Beijing and Guangdong. Only in two provinces.759 yuan compared with only 3. the shortfall between the minimum wage and average monthly living expenses reached as high as 595 yuan. a figure in excess of the national minimum wage of 575 yuan. the urban-rural income gap in real terms was probably six-fold. so that overtime accounted for between 30 to 50 percent of their final monthly pay packets. Taking into account the fact that rural residents effectively have no social security or welfare benefits.Although the government urged employers to pay higher than the minimum wage. the minimum wage in most provinces is below or barely reaches the recommended level of 40 percent (statistics: Proportion of minimum wages of monthly average wages 2006). nearly all of whom suffer from routine and institutionalized discrimination in the urban areas they have migrated to. with the basic food prices increasing by 18. . the price of a catty (about a pound) of pork in Guangdong had increased to 13. In 2006. the minimum wage in 2006 was around 20 per cent of the average monthly wage. seven days a week. many migrant workers in Dongguan had to extend their working hours to 12 to 14 hours a day. Their responses must focus on improving economic efficiency and social inclusion. The life of workers got worse in 2007 when inflation accelerated even further.9 percent. such as Beijing and Shanghai. The income discrepancy between rural and urban has been the main cause in the surge of migrant labour over the last two decades. In reality. In the more economically developed provinces. while the minimum wage in the province remained between 450 and 780 yuan. The gap between the average monthly wage and minimum wage in Beijing in 2006 was 2. and with only one day off a month.6 yuan. was the minimum wage equivalent to the average standard of living (statistics: Minimum wages minus average monthly living expense). the consumer price index rose to an 11-year high of 6.703 yuan. EUROPE AND CENTRAL ASIA All European and Central Asian countries are increasingly confronted with the challenges arising out of globalization.22 times. the establishment or consolidation of a functional market economy with a strong social component remains a key priority. In October 2007. It is estimated that there are about 120 migrant workers in China. the annual per capita disposable income of urban households was 11.27 times. For countries in Central and Eastern Europe and Central Asia. and in 2006 to 3. many low-skilled workers only received the minimum wage for a 40-hour working week.587 yuan in rural households.

However.Significant challenges remain. The ILO works with its members in the region to deal with these and other issues.Priorities in Europe in the 2010-11 biennium are being shaped by the 2008 ILO Declaration and the conclusions of the 8th European Regional Meeting in Lisbon (February 2009). The ILO will help these countries to mitigate the employment. ASIA AND THE PACIFIC The ILO’s Regional Office for Asia and the Pacific covers one of the most diverse regions of the world – ethnically. informal employment. labour and social impacts of the crisis through policy advice and technical assistance. insufficient social security coverage with low level of benefits. The economic crisis will deprive many workers of their jobs. shifts in the international economic environment and the spread of globalization continually generate new challenges. flexible approach is necessary to respond to changing political climates and emerging needs. impede the creation of new jobs and will aggravate the social situation of redundant workers and their families as well as the poor in general. and poverty are widespread phenomena. Respect for fundamental principles and rights at work helps to ensure that all sections of society benefit. In addition. In recent years the region has faced challenges that have seriously tested its social- economic infrastructure – natural disasters. including increasing productive employment opportunities. religiously and economically. economic crises and continuing conflicts. Low wages. A practical. the unfolding financial and economic crisis is expected to have significant negative impacts on the labour market and social situation in Europe and hit particularly Central and Eastern European and Central Asian countries with high current account deficits and those with low incomes. taking into account its gender dimensions. The population of more than 3. of low OSH standards and uncovered by social security schemes. culturally. providing adequate social protection. combating human trafficking. unemployment and under-employment. Employment creation has up until now also remained unsatisfactory and many new jobs are poorly paid. and tackling bonded labour and child labour. Institution building and local economic development play a critical role in social and economic progress.7 billion people includes some of the wealthiest countries on earth as well as two- thirds of the world’s poor. Work in the coming years will be guided by conclusions of the Eighth European Regional Meeting and Decent Work Country Programmes with the aim of supporting economic and social developments in priority countries. in particular in the informal economy. .

119. The average daily wage rates worked out to Rs. Rs. In 2003. United States of America and the UN Development Programme. Rs. The SRO- New Delhi works closely with the respective Liaison/Country Offices in Afghanistan. The population of more than 3. the Asian arm of the World Employment Programme of the ILO was hosted by the Government of India from 1986 till 1993 when ARTEP was integrated into South Asia Multi-disciplinary Advisory Team (SAAT) consequent upon the restructure of the ILO's field offices in 1994. A Branch Office of the ILO was established at Delhi in 1928 which became Area Office in 1970.136. Pakistan and Sri Lanka in implementing ILO activities.200.130. the Area Office for India and Bhutan and Multi-Disciplinary Team (MDT) were integrated to become the Subregional Office for South Asia (SRO-New Delhi). religiously and economically.The major donors for the ILO’s work in the region include the European Union.144. Rs.7 billion people includes some of the wealthiest countries on earth as well as two-thirds of the world’s poor. culturally. Sweden. The Asian Regional Team for Employment Promotion (ARTEP).16 in Jute Textiles. More than 30 countries in Asia and the Pacific are members of the ILO. Bhutan and Maldives.56 in Silk Textiles and Rs. This Multi-disciplinary Team with specialization in different fields of ILO's Mandate were providing Technical Advisory Services to the South Asian Countries. Japan.24 in Cotton Textiles. .70 in Synthetic Textiles. Bangladesh. Norway.24 in Woollen Textiles. The ILO covers one of the most diverse regions of the world – ethnically. In addition. SRO-New Delhi is responsible for ILO activities in the Islamic Republic of Iran and the two non-member countries viz. Republic of Korea. United Kingdom. Germany. the Netherlands. INDIA India is one of the founder members of the ILO and a permanent member of the ILO's Governing Body since 1922. Nepal.

In case of piece-rated workers.68.168. Amongst five textiles industries.136.31 for the Jute Textiles whereas. Rs. Further.50 for 'Mechanical/Electrical Foreman' and Rs.76 for 'Cooker' occupations respectively. the average daily wage rates of time-rated workers was the highest at Rs. the average daily wage rates for time-rated men.46.For all the textiles industries taken together.202.130.11 for Woollen Textiles respectively.94.72. the highest and the lowest average daily wage rates were reported Rs.209.73.33 in Woollen Textiles and Rs.62 respectively. the average daily wage rates of time-rated men and women workers were the highest at Rs.81 respectively.210.210. whereas.31 and Rs. The highest average daily wage rates of piece-rated men and women workers at the industry level was reported Rs.66 for Cotton Textiles.81 respectively.03 and Rs.77.58 in Woollen Textiles respectively.64.73.33 for 'Blacksmith' respectively. Woollen and Silk Textiles.141. for all the textiles taken together.167.101.96.55 respectively in Jute Textiles.193. In Woollen Textiles.13 for 'Sorter' occupations respectively. Rs.89 for 'Head Jobber' and Rs.62 and Rs. The Table reveals that average daily wage rates of women workers were less than that of the men workers in all the five textiles industries.86 and Rs.273. In Synthetic Textiles.128.70.46 for Jute Textiles and Rs. the average daily wage rates for piece-rated men. The highest and lowest average daily wage rates in Silk Textiles were reported Rs.At the stratum level taking all Textiles together the highest average daily wage rate was reported in West Bengal Rs. women and all workers were reported Rs.49 in Jute Textiles and Rs.193.136. At the industry level.307. In . the hlowest average daily wage rates of piece-rated men and women workers was reported Rs.128.87.45 for Jute Textiles and the lowest at Rs.26 respectively in Cotton Textiles. the average daily wage rates of women workers were lower than their male counterparts in all the strata of all five textiles industries except Punjab stratum of Woollen textiles industry. at the stratum level also. the highest and the lowest average daily wage rates were reported Rs.75 for 'Tape Man' occupations respectively.105. Rs. women and all workers were Rs.79 respectively. The overall average daily wage rates of men. In Cotton Textiles. The average daily wage rates of time-rated workers were more than that of the piece-rated workers in Cotton. the highest and the lowest average daily wage rates were reported at Rs.15 in Silk Textiles respectively. whereas it was reverse for Synthetic and Jute Textiles.52 for the Silk Textiles. the highest and the lowest average daily wage rates were reported at Rs.119. For all the textiles industries combined. The average daily wage rates of time-rated and piece-rated workers worked out to be Rs.235.07 and Rs. the lowest average daily wage rate was reported in Tamil Nadu stratum Rs. women and all workers for all the five textiles industries combined together were Rs.19 for 'Supervisor' and Rs.293. whereas the lowest average daily wage rates for time-rated men and women workers were Rs.72.69.150.69 for 'Front Sizer/Sizer' and Rs.12 and Rs.110.

43 for 'Breaker Receiver' and Rs.38 for 'Mechanic (General)' occupations respectively. the highest and lowest average daily wage rates were reported Rs.00 0.00 Regular Pay + 200 % For OverTime on Weekdays Regular Pay + 200 % For OverTime on Sundays / Holidays OT RATE/ HOUR 44. The ILO Office was established in Pakistan in 1970 which was first located in Karachi and later shifted to Islamabad when it became capital of the country. Employers' and Workers' representative have been elected Members of the ILO Governing Body repeatedly over the years. Report No.115.12 OVERTIME PREMIUM 200. Before that. Pakistan's Government. COUNTRY Pakistan CURRENCY PKR EXCHANGE RATE 60 PER US$ .Jute Textiles. the ILO had a Correspondence Office in Karachi with an ILO National Correspondent. PAKISTAN Pakistan has been as important and active Member State of the ILO since its inception in 1947.229.00 STANDARD WORK SCHEDULE DAYS PER WEEK 6 HOURS PER DAY 8 HOURS PER WEEK 48 HOURS PER MONTH 208 STD PAY PER HOUR 22.00 FACTORY Project No. WAGE PAY SYSTEM LEGAL MINIMUM WAGE 4600.23 0.

00 4600.31 5042.0 0.0 240.69 5307.0 13.00 973.0 0.00 12.00 11.0 208.0 216.00 9.00 353.00 4600.0 32.00 4600.85 5017.00 8.00 530.00 398.0 208.0 8.00 1017.00 4600.77 5130.00 5175.0 0.38 6015.0 12.75 AVERAGE HOURS WORKED 222.00 442.00 8.00 22.04 5390.00 4600.31 5042.0 23.0 0.00 4600.00 774.00 19.54 5167.38 6192.00 4600.0 0.85 4953.0 11.00 530.0 208.0 208.00 4600.0 220.0 0.0 208.31 5617.0 10.0 231.0 220.0 227.00 4600.31 5716./Hol.00 1415.0 224.0 218.0 12.0 0.0 208.00 4600.00 4600.0 230.0 220.85 4953.0 23.0 0.77 5130.31 5042.00 23.85 5020.0 208.00 23.38 5440.0 208.08 5019.00 16.00 4600.08 5067.00 9.38 5567.77 5302.77 5130.0 0.0 208.77 5231.00 442.0 10.0 208.00 4600.08 5573.00 4600.00 486.0 12.00 10.04 5374.0 0.77 5345.0 8.00 12.00 10.00 .0 208.00 17.0 16.0 0.00 4600.0 208.08 4998.00 4600.0 13.73 5506.0 19.0 22.54 5086.0 218.00 4600.0 208.5 208. HOURS REG PAY OT PAY TOTAL TOTAL 20.0 219.20 LEGAL REQUIRED PAY MINIMU Total OT Regular OT OT TOTAL MINIMUM MINIMUM M ACTUAL HOURS Hours Weekdays Sun.69 5400.00 575.0 0.0 10.0 208.0 217.0 0.00 398.73 5602.0 225.0 0.0 9.00 32.31 5098. LEGAL AGE 18 PERIOD REVIEWED October 2007 through January 2008 EMPLOYEE HEADCOUNT No.0 221.00 707.08 4998.00 13.0 0.00 840.0 9.0 208.0 218.0 208.00 12.0 0.00 530.0 216.0 12.00 1017.00 4600.0 0.0 231.31 5617.00 442.00 906.08 5600.5 208.00 4600.00 5241.0 0.00 10.00 4600.0 220. of Employees on Payroll SAMPLE TOTAL 20 AVERAGE WAGES PAID 5344.31 5678.0 221.31 5100.0 0.31 5143.0 0.0 208.0 200.00 353.

who took office in October 2004 after the country’s first direct presidential election.2 . a just and democratic Indonesia. Many Indonesians seek better opportunities abroad – there are about four million documented migrant workers from Indonesia and it is estimated that the number of undocumented migrants is 2 to 4 times higher. In February 2006. a prosperous Indonesia. This is set out in the Indonesian Government’s National Medium Term Development Plan 2004 – 2009 (RPJM). Indonesia’s open unemployment rate has risen from 9. which focuses on four broad objectives: creating a safe and peaceful Indonesia. create jobs.3 September 105. with young women and men and those living in conflict and crisis affected areas most at risk. Despite an annual average GDP growth of 5% between 2002 and 2006. so as to generate employment. Youth.7 108. the Government announced new policy measures to improve the investment climate in Indonesia for both domestic and foreign investors.INDONESIA Indonesia has a market-based economy in which the government plays a significant role.8 215.8 184. as one example.1% to 10. harmonize central and regional regulations. excise. at 30%.8 106.4 113. pro-employment" economic programme to reduce unemployment and poverty significantly. The package consists of policies designed to strengthen investment services.0 March 102.1 209. In addition to unemployment.4 116. and establishing a stable macroeconomic framework for development. underemployment also remains prevalent. has implemented a "pro-growth.7 221.8 100.4% during the same period and half the population of 220 million continue to live under the US$2 per day poverty line.1 209. and support small and medium enterprises.2 119. improve customs.0 184.0 100. Socio-economic exclusion of the marginalized and vulnerable in society is a continuing concern. The President.0 196. The skills base and productivity of the labour force is insufficient and there is continued exploitation at work.4 June 1997 102. and more than two-thirds of the employed are in the informal economy. are three times more likely to be unemployed than adults. Industri / Manufacturing Indeks Tahun / Upah Indeks Upah Bulan / Month IHK / CPI Nominal / Upah Riil /Nominal / Upah Riil Year / Real Nominal Real Wage Nominal Wage Wage (000) Wage Index Index (1) (2) (3) (4) (5) (6) (7) 1996 100.7 113. and taxation services.2 201. pro-poor.

0 260.3 December 221.3 155.3 174.2 244.7 December 274.5 1015.3 301.3 1152.3 194.9 86.0 184.3 150.2 2004 September 299.9 267.5 250.5 145.3 549.3 260.1 405.7 144.6 148.5 1045.1 105.2 June 208.6 568.8 461.1 209.6 174.2 June 369.7 146.8 99.1 137.6 155.0 749.4 256.6 119.8 June 2007 390.8 343.2 269.3 289.6 88.2 227.0 March 257.7 March 290.5 535.6 74.60 260.6 275.9 September*) 399.5 653.5 85.0 June 204.3 493.3 March 366.3 503.5 June 163.7 281.5 March 276.6 287.3 2005 September 326.2 154.0 163.5 279.9 412.8 2000 September 211.2 876.8 1050.3 December 198.3 518.0 March 316.9 725.4 256.6 133.2 691.0 125.2 474.4 268.3 390.0 133.1 220.0 June 319.1 2001 September 239.3 666.2 258.1 353.8 363.6 December**) .6 254.4 531.9 443.6 1148.4 853.2 104.8 224.3 140.1 135.2 December 306.4 556.6 957.1 323.9 268.1 158.0 840.5 108.9 144.7 169.8 140.0 982.0 113.2 145.9 151.7 December 249.7 1999 September 198.0 June 260.1 1998 September 196.2 December 382.2 384.8 2003 September 280.7 March 142.4 June 277.5 516.2 548.0 131.0 180.9 242.5 148.2 76.5 June 297.2 December 198.8 85.6 December*) 407.2 2006 September 373.9 633.4 March 226.7 254.0 231.9 930.6 911.8 565.3 193.8 290.3 139.9 March 206.7 564.1 360.3 June 233.0 March 204.5 June*) 2008 440.7 621.5 722.6 270.2 255.7 162.5 322.3 623.2 88.1 281.3 229.7 617.0 September*) 453.42 257.7 259.4 250.3 157.6 277.0 135.5 954.5 507.6 137.6 December 358.9 121.2 152.4 536.4 March 389.9 74.1 138.5 855.6 247.9 1043.9 152.8 122.4 207.4 March*) 421.5 157.6 138.6 285.6 819.2 145.0 296.6 140.December 111.6 223.2 80.1 392.7 313.3 333.2 286.5 141.3 374.6 124.6 200.2 990.1 159.1 937.6 137.2 462.2 454.6 267.9 245.4 427.3 138.7 December 288.4 139.6 2002 September 264.2 132.3 232.1 671.7 1141.6 140.0 473.

As well as being the second largest contributor to the ILO s budget the Japanese government is also a major donor to technical cooperation projects. employment and enterprise development. with a focus on achieving the goals of the Asian Decent Work Decade (2006-2015). A Decent Work Country Programme (DWCP) is expected to be finalized soon. in 2008 the total contribution was close to US$60 million. occupational safety and health. In addition. 2006 (No. Productivity has increased tremendously and the structural changes towards a market-based economy are considerable and have been supported by Viet Nam’s membership of the World Trade Organization (WTO) which it joined in 2007. and. the core ILO concerns of social dialogue. Since 2006 Viet Nam has been a One UN pilot country. the most recent was the Promotional Framework for Occupational Safety and Health Convention. when Japan withdrew from the ILO. and the formulations of labour laws. 187). The ILO opened a branch office in Tokyo in November 1923 and although the office closed from 1940-51. Japan has ratified 48 ILO Conventions (including six of the eight core conventions). cooperative and businesses. also support ILO work.VIET NAM Viet Nam has a population of approximately 86 million people. The ILO has integrated all its activities into the One UN Plan clustered around three strategic priority areas. The ILO Office in Viet Nam opened in 2003. the ILO’s work in the country covers a wide range of areas including social insurance. industrial relations and the ratification of ILO Conventions. Decent work is actively promoted by tripartite constituents and the ILO Association of Japan. research institutes. These include employment and sustainable enterprise development. JAPAN As a founding member. A national cooperation Framework on Promoting Decent Work (2006-2010) was signed by ILO and its constituents on 12 July 2006. it was re-established soon after country's readmission to the organization. Since the beginning of the “doi moi” reforms in 1986 Viet Nam has made remarkable progress in terms of economic and social development. . Japanese employers and workers organizations. international labour standards and gender are integrated into each of these priority areas of work. social protection. ratified on 24 July 2007. Decent Work National Plan of Action is prepared by each fiscal year since 2007. and currently the Japanese employers and workers groups are also represented. and labour market governance. The Japanese government holds one of ten permanent seats on the ILO Governing Body. Currently. Japan has a relationship with the ILO dating back to 1919.

Since joining the ILO South Korea has become the eleventh largest contributor to the ILO regular budget. KOREA The Republic of Korea has been a member of the ILO since 1991. . including additional networking between experts and more reporting on labour and social trends. Improving workplace relations and practices. The country has ratified a total of 24 ILO Conventions. The first three areas are under the responsibilities of the ILO Regional Office for Asia and the Pacific while the last area is managed by ILO Headquarters in Geneva. in the light of changing work patterns. The Korean government has a mid-term plan to ratify more ILO conventions. gainful employment for migrants. The current ILO/Korea Partnership Programme works with countries to improve their knowledge and the coherence of their policies relating to productivity. women. and the provision of productive. based in Bangkok. a Decent Work Country Programme (2007-09) has been developed to guide ILO activities. The 2007-2008 ILO/Korea Partnership Programme focuses on four areas: Competitiveness. This DWCP includes five priorities: • Promoting the ratification of ILO Conventions.ILO work in Korea is supported through the ILO Subregional Office for East Asia. growth. migrant workers and other excluded groups. • Mobilizing resources. particularly providing systems that help those involved with labour migration find the information they need. Governance and Social Protection. South Korea is committed to the development of decent work in the region and the ILO is working with the constituents to facilitate their work in other countries in the region (particularly ASEAN member countries). including at least two more Fundamental Conventions.following consultations. Thailand. including four of the eight ILO fundamental conventions (covering discrimination and child labour). the creation of common regional skills standards for workers. and Research on Decent Work and Occupational Safety and Health. Labour Migration. Projects also cover skills development policies and programmes that have a particular focus on disabled persons. • Strengthening information-related activities. health. The management of labour migration is another Programme concern. employment creation and job quality. through the ILO/Korea Partnership Programme. income protection for workers and their dependants are other focuses of attention. • Promoting social dialogue. Productivity and Jobs. • Supporting the realization of decent work.

The rate for 18 to 21-year-olds will increase by 6p to £4. The change will come a year after the statutory hourly rate was increased by 21p an hour.83 and for 16 and 17-year-olds will go up by 4p to £3. The government said that nearly one million people would benefit from October's increase. 19 and 20 . Business leaders had recently called for the minimum wage to be left at the current levels in 2009 amid the economic downturn. . It also announced that.57. At present their minimum wage is set . the adult statutory minimum rate would apply to 21-year-olds.at a lower rate. from October 2010.80 an hour from October.together with workers aged 18.UNITED KINGDOM The UK minimum wage will rise by 7p to £5. the government has announced.