Richard D. Wolff
Wage growth in the world slowed to an average of 2 percent in 2013. That was less than in 2012 and far less than the pre-crisis rate of 3 percent. Starker still were the differences between wage growth in the “developed world” (chiefly Western Europe, North America and Japan) and wage growth in the major “emerging growth” countries, chiefly China.
In the “developed world” wage growth in 2012 was 0.1 percent, and in 2013 it was 0.2 percent. Far from portending any economic “recovery,” that level of wage “growth” is rather called “wage stagnation.” In stunning contrast, wage growth in the major emerging growth economies was much better: 6.7 percent in 2012 and 5.9 percent in 2013.
These remarkable statistics come from the Global Wage Report 2014/15 released on December 5, 2014, by its author, the International Labor Organization (ILO). This report clearly exposes the immense costs of a globalizing capitalism for the wage-earning majorities in Western Europe, North America and Japan. Allowing their leading capitalists to maximize profits by relocating production out of those regions is deeply and increasingly destructive to them.
The ILO report’s chart below summarizes the key wage results of the last decade’s capitalism. Economic growth, rising real wages and rising standards of living are economic realities in China and other emerging growth countries. Economic crisis, stagnant wages and declining working and living standards are the economic realities for Western Europe, the United States and Japan.