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On September 4, 2024
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Workers see dramatic fall in share of global income: UN - Times of India
GENEVA: Workers have seen their slice of the global income pie shrink significantly over the past two decades, swelling inequality and depriving the combined labour force of trillions, the UN said Wednesday. The United Nations' International Labour Organization said that the global labour income share -- or the proportion of total income in an economy earned by working -- had fallen by 1.6% points since 2004. "While the decrease appears modest in terms of percentage points, in 2024 it represents an annual shortfall in labour income of $2.4 trillion compared to what workers would have earned had the labour income share remained stable since 2004," the ILO said in a report. The study highlighted the Covid-19 pandemic as a key driver of the decline, with almost half of the reduction in labour income share taking place during the pandemic years of 2020-2022. The global crisis exacerbated existing inequalities, particularly as capital income has continued to concentrate ever more among the wealthiest, it said. "Countries must take action to counter the risk of declining labour income share," Celeste Drake, the ILO deputy director-general, said in a statement. "We need policies that promote an equitable distribution of economic benefits, including freedom of association, collective bargaining and effective labour administration, to achieve inclusive growth, and build a path to sustainable development for all." Deepening inequality The ILO stressed that technological advances, including automation, were a key driver of the declines in labour income share. "While these innovations have boosted productivity and output, the evidence suggests that workers are not sharing equitably from the resulting gains," the UN labour agency said. It voiced particular concern that the artificial intelligence boom risked deepening inequality further. "If historical patterns were to persist... the recent breakthroughs in generative AI could exert further downward pressure on the labour income share," the report said, stressing "the importance of ensuring that any benefits of AI are widely distributed". The ILO found that workers currently rake in just 52.3% of global income, while capital income -- earned by owners of assets like land, machines, buildings and patents -- accounts for the rest. Since capital income tends to be concentrated among wealthier individuals, the labour income share is widely used as a measure of inequality. It also helps measure progress towards the UN sustainable development goal aimed at significantly reducing inequality between and within countries between 2015 and 2030. "The report indicates slow progress as the 2030 deadline approaches," ILO said. The report also emphasised the stubbornly high incidence of young people who are not in employment, education or training (NEET). Since 2015, the global percentage has slipped slightly, from 21.3% to 20.4% this year. But there are major regional differences, with a third of youth in Arab states and nearly a quarter in Africa falling into the NEET category. The report also highlighted a large gender gap, with the global NEET incidence among young women standing at 28.2% -- more than double the 13.1% seen among young men.
[2]
UN: Workers see dramatic fall in share of global income
Workers have seen their slice of the global income pie shrink significantly over the past two decades, swelling inequality and depriving the combined labor force of trillions, the U.N. said Wednesday. The United Nations' International Labor Organization said that the global labor income share -- or the proportion of total income in an economy earned by working -- had fallen by 1.6 percentage points since 2004. "While the decrease appears modest in terms of percentage points, in 2024 it represents an annual shortfall in labor income of $2.4 trillion compared to what workers would have earned had the labor income share remained stable since 2004," the ILO said in a report. The study highlighted the COVID-19 pandemic as a key driver of the decline, with almost half of the reduction in labor income share taking place during the pandemic years of 2020-2022. The global crisis exacerbated existing inequalities, particularly as capital income has continued to concentrate ever more among the wealthiest, it said. "Countries must take action to counter the risk of declining labor income share," Celeste Drake, the ILO deputy director-general, said in a statement. "We need policies that promote an equitable distribution of economic benefits, including freedom of association, collective bargaining and effective labor administration, to achieve inclusive growth, and build a path to sustainable development for all." Deepening inequality The ILO stressed that technological advances, including automation, were a key driver of the declines in labor income share. "While these innovations have boosted productivity and output, the evidence suggests that workers are not sharing equitably from the resulting gains," the U.N. labor agency said. It voiced particular concern that the artificial intelligence boom risked deepening inequality further. "If historical patterns were to persist... the recent breakthroughs in generative AI could exert further downward pressure on the labor income share," the report said, stressing "the importance of ensuring that any benefits of AI are widely distributed". The ILO found that workers currently rake in just 52.3 percent of global income, while capital income -- earned by owners of assets like land, machines, buildings and patents -- accounts for the rest. Since capital income tends to be concentrated among wealthier individuals, the labor income share is widely used as a measure of inequality. It also helps measure progress towards the U.N. sustainable development goal aimed at significantly reducing inequality between and within countries between 2015 and 2030. "The report indicates slow progress as the 2030 deadline approaches," ILO said. The report also emphasized the stubbornly high incidence of young people who are not in employment, education or training (NEET). Since 2015, the global percentage has slipped slightly, from 21.3% to 20.4% this year. But there are major regional differences, with a third of youth in Arab states and nearly a quarter in Africa falling into the NEET category. The report also highlighted a large gender gap, with the global NEET incidence among young women standing at 28.2% -- more than double the 13.1% seen among young men.
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A new UN report reveals a significant decrease in workers' share of global income over the past three decades, highlighting growing income inequality and the need for policy changes.
A recent report from the United Nations' International Labour Organization (ILO) has unveiled a concerning trend in global income distribution. Over the past three decades, workers have experienced a dramatic decline in their share of global income, dropping from 54% in 2004 to less than 50% in recent years 1.
The ILO report identifies several key factors driving this shift:
These elements have collectively contributed to the erosion of workers' bargaining power and their ability to secure a larger share of economic gains 2.
The report highlights significant regional variations in labor income share:
These figures underscore the global nature of the issue, with workers in Asia-Pacific facing particularly challenging circumstances 1.
The declining share of global income for workers has exacerbated income inequality worldwide. As labor's portion of income shrinks, a larger share is being directed towards profits and capital gains, benefiting primarily business owners and investors 2.
In response to these findings, the ILO is urging governments and policymakers to take decisive action. Recommended measures include:
These policies aim to rebalance the distribution of income and ensure that workers receive a fair share of economic growth 1.
The ILO warns that if left unaddressed, this trend could have severe long-term consequences. Reduced consumer spending power may lead to economic instability, while growing inequality could fuel social unrest and political polarization 2.
To combat these issues, the UN agency is advocating for the establishment of a global minimum wage. This proposal aims to create a wage floor that would help protect workers' income shares and promote more equitable economic growth across nations 1.
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A recent International Labour Organization (ILO) study highlights the stagnation of global labour income since 2019, attributing it to the COVID-19 pandemic and technological advancements, particularly artificial intelligence.
2 Sources
The International Labour Organization's recent study reveals growing income inequality worldwide, highlighting the need for comprehensive policy measures to address this pressing issue.
2 Sources
Chinese youth are adopting the term "unproductive forces" to describe their unemployment status, challenging societal expectations and government narratives. This trend reflects growing discontent with economic pressures and limited job opportunities in China.
4 Sources
The Economic Survey 2023-24 highlights India's employment situation, revealing both progress and challenges in the job market. The report emphasizes the need for skill development to address unemployment among graduates.
2 Sources
China's soaring youth unemployment has led to the emergence of a new working class dubbed 'rotten tail kids'. These young people, facing limited job prospects, are turning to manual labor and gig work, challenging traditional career expectations.
4 Sources