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BW Businessworld

No Salary Hike? Blame Your Boss, Not China

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Stagnant wage growth in rich countries is a result of corporate penny-pinching and not competition from cheap Chinese labour, the International Labour Organization said on Friday.
Average wages in developed countries have grown only 0.4 per cent since 2009 despite a 5.3 per cent increase in workers' productivity, the ILO said in its latest Global Wage Report.
Globally, wages are slowly converging as poor countries close the gap with rich countries. Wage growth in developed economies was a 0.1 per cent in 2012 and 0.2 per cent in 2013, while developing economies saw increases of 6.7 per cent and 5.9 per cent respectively.
But it is not cheap labour competition that is causing wages to stagnate in more advanced economies, said Sandra Polaski, the ILO's deputy director for policy.
"If productivity levels are increasing you can accommodate the competition because the productivity of your firm will allow you to continue to pay good wages and still be able to compete."
Profits have recovered since the global financial crisis but that income was not being reinvested at the rate that was seen previously, Polaski said.
"It's sitting on this retained profitability that's not producing good results for the global economy.
"Those lower incomes in these advanced economies are reducing household demand which is decreasing overall aggregate demand."
Fast-Food Workers Stage Strike
Fast-food workers and others in low-pay jobs launched one-day strikes and protests across the United States demanding a $15 an hour minimum wage and union rights.
Organisers said workers at major chains like McDonald's, Burger King, Wendy's and Taco Bell walked off their jobs in more than 190 cities, from Los Angeles and Phoenix to Chicago, New York and Washington.
For the first time since fast-food workers began walkouts two years ago, they were joined by workers from convenience stores and markets in 24 cities, the Fight for $15 campaign said in a statement.
Employees in low-wage jobs and labour unions supporting them are pushing to raise the minimum hourly wage to $15 -- about double the current federal minimum of $7.25.
Workers say they are fed up with pay that does not come close to keeping them out of poverty and the threat of retaliation from employers hostile to them joining or forming unions.
"Every day I look my kids in the face and they realise we live in poverty. They are the reason I fight," Terrence Wise, a 35-year-old father of three who is paid $9.30 an hour at Burger King in Kansas City, Missouri, said in the statement.
At 10 major airports, baggage handlers, skycaps, wheelchair attendants and aircraft cleaners were demonstrating in support of the strikers, the organisers said.
And home-care workers, which launched the Home Care Fight for $15 in September, were protesting in more than two dozen cities from coast to coast, according to the Fight for $15 campaign.
The movement has grown since a few hundred fast-food workers went on strike in late November 2012 to push for a "living wage" of $15 an hour.