Global Labour Income Stagnation: COVID-19 and AI Impact Revealed in ILO Study

Global Labour Income Trends

The International Labour Organization (ILO) has released a study revealing that global labour income has remained stagnant since 2019. This lack of growth is primarily attributed to two major factors: the COVID-19 pandemic and the rapid advancement of technology, particularly artificial intelligence (AI) 1

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Impact of COVID-19

The COVID-19 pandemic has had a significant impact on the global labour market. The ILO report indicates that the pandemic led to widespread job losses and reduced working hours, which directly affected labour income. Many businesses were forced to shut down or scale back operations, resulting in decreased wages and employment opportunities for workers across various sectors 1

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Technological Advancements and AI

The study also highlights the role of technological upgradation, especially AI, in the stagnation of labour income. As businesses increasingly adopt AI and automation technologies, there has been a shift in the demand for certain job skills. This transition has led to job displacements in some sectors and has put downward pressure on wages for certain types of work 2

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Regional Disparities

The ILO report reveals significant regional differences in labour income trends. While some regions have experienced growth, others have seen declines:

1. Asia and the Pacific: Showed the highest growth rate at 1.2% per year.
2. Europe and Central Asia: Experienced growth of 0.5% annually.
3. Africa: Faced a decline of 0.4% per year.
4. Americas: Saw the steepest decline at 0.8% annually 1

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Income Inequality Concerns

The stagnation in labour income has raised concerns about increasing income inequality. The ILO study suggests that the benefits of economic growth and technological advancements are not being equally distributed among workers. This trend could potentially widen the gap between high-skilled, high-wage workers and those in lower-paying jobs 2

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Future Implications

As AI and other technologies continue to advance, the labour market is likely to face further challenges. The ILO emphasizes the need for policies that address the impact of technological change on workers and ensure a fair distribution of the benefits of economic growth. This may include initiatives for reskilling and upskilling workers, as well as measures to protect vulnerable workers in the changing job market 1

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