GAR 2015 Main Report

196

Part III - Chapter 9

continue to depress real wages in many sectors while governments likewise cut spending on social welfare and safety nets (ILO, 2013

ILO (International Labour Office). 2013,Global Wage Report 2012/13: Wages and equitable growth, Geneva: International Labour Office.. .

; UNISDR, 2013a

UNISDR. 2013a,Global Assessment Report on Disaster Risk Reduction: From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction, Geneva, Switzerland: UNISDR.. .

). As a result, wages for large parts of the population have not kept up with economic growth, the benefits of capital accumulation have not trickled down, and working conditions have become more precarious for larger numbers of people. For example, labour productivity increased more than twice as much as wages in developed countries between 1999 and 2011 (ILO, 2013

ILO (International Labour Office). 2013,Global Wage Report 2012/13: Wages and equitable growth, Geneva: International Labour Office.. .

). At the same time, competitive new sectors in the world economy in areas like biotechnology and nanotechnology seem unlikely to generate significant future demand for unskilled or low-skilled labour (Castells et al., 2012

Castells, M., J. Caraça and G. Cardoso. 2012,Aftermath, The Cultures of the Economic Crisis. Oxford: Oxford University Press.. .

In the United States, labour productivity grew by 75 per cent in the non-farm sector between 1980 and 2011, while wages increased by only 35 per cent. In China, where wage levels have tripled over the past decade, GDP increased at an even faster rate, resulting in the labour share going

down (ILO, 2013

ILO (International Labour Office). 2013,Global Wage Report 2012/13: Wages and equitable growth, Geneva: International Labour Office.. .

). There has been a long-term trend towards corporate profits rising while wages fall. Income gaps between the top 10 per cent of earners and the bottom 10 per cent have widened (ibid.). However, what may be most important is that global median wealth (as a proxy for the wealth of the middle class) has decreased steadily since 2010 (Figure 9.10), highlighting that the economic recovery after the financial crisis of 2008 has, to date, been short-lived.

This global trend may persist, with a steady increase in inequality over decades to come (OECD, 2011; Piketty, 2014

Piketty, Thomas. 2014,Capital in the Twenty-First Century, First Edition edition. Belknap Press.. .

). This increase will continue as global economic output (and therefore income levels) is projected to continue to grow at a lower rate than return on capital (Figure 9.11). In other words, those who are dependent on income from labour for their well-being will struggle even more to create even a small asset base.

Should inequality continue to increase in this manner, even a growing middle class of

Figure 9.9 Global distribution of wealth

(Source: UNISDR with data from www.worldmapper.org.)

	196 Part III - Chapter 9 continue to depress real wages in many sectors while governments likewise cut spending on social welfare and safety nets (ILO, 2013 x ILO (International Labour Office). 2013,Global Wage Report 2012/13: Wages and equitable growth, Geneva: International Labour Office.. . ; UNISDR, 2013a x UNISDR. 2013a,Global Assessment Report on Disaster Risk Reduction: From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction, Geneva, Switzerland: UNISDR.. . ). As a result, wages for large parts of the population have not kept up with economic growth, the benefits of capital accumulation have not trickled down, and working conditions have become more precarious for larger numbers of people. For example, labour productivity increased more than twice as much as wages in developed countries between 1999 and 2011 (ILO, 2013 x ILO (International Labour Office). 2013,Global Wage Report 2012/13: Wages and equitable growth, Geneva: International Labour Office.. . ). At the same time, competitive new sectors in the world economy in areas like biotechnology and nanotechnology seem unlikely to generate significant future demand for unskilled or low-skilled labour (Castells et al., 2012 x Castells, M., J. Caraça and G. Cardoso. 2012,Aftermath, The Cultures of the Economic Crisis. Oxford: Oxford University Press.. . ). In the United States, labour productivity grew by 75 per cent in the non-farm sector between 1980 and 2011, while wages increased by only 35 per cent. In China, where wage levels have tripled over the past decade, GDP increased at an even faster rate, resulting in the labour share going down (ILO, 2013 x ILO (International Labour Office). 2013,Global Wage Report 2012/13: Wages and equitable growth, Geneva: International Labour Office.. . ). There has been a long-term trend towards corporate profits rising while wages fall. Income gaps between the top 10 per cent of earners and the bottom 10 per cent have widened (ibid.). However, what may be most important is that global median wealth (as a proxy for the wealth of the middle class) has decreased steadily since 2010 (Figure 9.10), highlighting that the economic recovery after the financial crisis of 2008 has, to date, been short-lived. This global trend may persist, with a steady increase in inequality over decades to come (OECD, 2011; Piketty, 2014 x Piketty, Thomas. 2014,Capital in the Twenty-First Century, First Edition edition. Belknap Press.. . ). This increase will continue as global economic output (and therefore income levels) is projected to continue to grow at a lower rate than return on capital (Figure 9.11). In other words, those who are dependent on income from labour for their well-being will struggle even more to create even a small asset base. Should inequality continue to increase in this manner, even a growing middle class of Figure 9.9 Global distribution of wealth (Source: UNISDR with data from www.worldmapper.org.)	Page 1 Page 10 Page 20 Page 30 Page 40 Page 50 Page 60 Page 70 Page 80 Page 90 Page 100 Page 110 Page 120 Page 130 Page 140 Page 150 Page 160 Page 170 Page 180 Page 186 Page 187 Page 188 Page 189 Page 190 Page 191 Page 192 Page 193 Page 194 Page 195 Page 196 Page 197 ->Page 198 Page 199 Page 200 Page 201 Page 202 Page 203 Page 204 Page 205 Page 206 Page 207 Page 208 Page 209 Page 210 Page 220 Page 230 Page 240 Page 250 Page 260 Page 270 Page 280 Page 290 Page 300 Page 310