From International Labour Organization
World of Work Report 2008
Income Inequality in the age of Financial Globalization
The ongoing global economic slowdown is aff ecting low-income groups disproportionately.
Th is development comes aft er a long expansionary phase where income inequality
was already on the rise in the majority of countries.
● The recent period of economic expansion was accompanied by substantial employment
growth across most regions. Between the early 1990s and 2007, world employment
grew by around 30 per cent. However, there was considerable variation in labour
market performance between countries. In addition, not all individuals shared equally
in the employment gains. In a number of regions, women continued to represent a
disproportionate share of non-employed persons – reaching nearly 80 per cent in the
Middle East, North Africa and Asia and the Pacific.
● Employment growth has also occurred alongside a redistribution of income away from
labour. In 51 out of 73 countries for which data are available, the share of wages in total
income declined over the past two decades. Th e largest decline in the share of wages
in GDP took place in Latin America and the Caribbean (-13 points), followed by Asia
and the Pacifi c (-10 points) and the Advanced Economies (-9 points).
● Between 1990 and 2005, approximately two thirds of the countries experienced an
increase in income inequality (as measured by changes in the Gini index). In other words,
the incomes of richer households have increased relative to those of poorer households.
Likewise, during the same period, the income gap between the top and bottom 10 per
cent of wage earners increased in 70 per cent of the countries for which data are available.
● The gap in income inequality is also widening – at an increasing pace – between the
fi rms’ executives and the average employee. For example, in the United States in 2007,
the chief executive offi cers (CEOs) of the 15 largest companies earned 500 times more
than the average worker. Th is is up from 360 times more in 2003. Even in Hong Kong
(China) and South Africa where executives are paid much less than their United States’
counterparts, CEO pay still represents 160 and 104 times, respectively, the wages of
the average worker.
Contents
Preface- Editorial
Chapter 1. Trends in employment and inequality
Main findings
Introduction
A. Overview of recent developments and employment trends
B. Trends in income inequality
C. Why is income inequality a matter of policy concern?
D. Bottom line and rationale for the next chapters
Appendix A. Regional country groupings
Appendix B. Calculation methods for wage dispersion, wage
shares,
productivity and real wage growth
References
Chapter 2. The role of financial globalization
Main findings
Introduction
A. Development of financial globalization and wealth
inequality
B. Financial markets and pro-poor growth
C. Financial globalization, union bargaining power and the
wage share
D. Financial globalization and the convergence of capitalisms
E. Corporate governance and executive pay
F. Policy considerations
Appendix A. The impact of financial market crises on growth
and inequality:
An empirical assessment
Appendix B. Empirical studies regarding pay for
performance
References
Chapter 3. Labour institutions and inequality
Main findings
Introduction
A. Review of earlier studies
B. Cross-country patterns of labour institutions and income inequality
C. Policy considerations
Appendix A. Measures of labour institutions
Appendix B. Do labour institutions reduce inequality? An econometric analysis
Appendix C. Is the inequality-reduction eff ect of industrial relations
institutions withering away in advanced countries?
References
Chapter 4. Changing employment patterns
Main findings
Introduction
A. No clear link between income inequality and employment growth
B. Rising non-standard employment as a factor of income inequality
C. Policy considerations
References
Chapter 5. Redistribution through taxes and social transfers
Main findings
Introduction
A. Social transfers, taxation and income inequality: what are the trends?
B. To what extent do taxes and social transfers shape income distribution?
C. Policy considerations
References
Chapter 6. Decent Work as a coherent policy package
Introduction
A. Links between Decent Work and income inequality
B. Policy coherence
C. Areas for further analysis
References
Recent publications
|
