ILO warns of rise in inflation a prime cause of increasing poverty, civic unrest
In a report published this week, the ILO (International Labor Organization) has issued a stark warning that continuing rise in inflation has led to a drastic reduction in monthly wages across many countries. The ILO further highlights the critical need for targeted policies for preventing any further poverty, inequality and social unrest, which are being exaggerated by the inflation and reduction in daily wages.
ILO has noted that the rapid decline in global monthly wages in real terms was up to -0.9 per cent during the first half of the year. This has led to reduction in the purchasing power of middle class families, while the most hit have been low income households.
“The multiple global crises we are facing have led to a decline in real wages. It has placed tens of millions of workers in a dire situation as they face increasing uncertainties,” said Gilbert F. Houngbo, the ILO Director-General, warning of the potential consequences.
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— International Labour Organization (@ilo) November 30, 2022
New @ilo report finds that the current crisis is reducing the purchasing power of households in many countries.
What's needed to prevent the deepening of existing levels of poverty & inequality?
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“Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained,” he said. “In addition, a much-needed post-pandemic recovery could be put at risk. This could fuel further social unrest across the world and undermine the goal of achieving prosperity and peace for all.”
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The report titled Global Wage Report 2022-2023 has revealed how the severe crisis of inflation amalgamated with economic growth slowdown, as a direct impact of the Ukraine war and energy crisis globally, has rendered a devastating effect on global pay packets. Rising inflation has inflicted most drastic impact on poorer families, “as most of their disposable income is spent on essential goods and services which generally experience greater price increases compared to non-essential items”, notes the UN News.
This reiterates the notion that it is time to pay keen attention on the lower and middle class and their wages. “We must place particular attention on workers at the middle and lower end of the pay scale,” said Rosalia Vazquez-Alvarez, one of the report’s authors. “Fighting against the deterioration of real wages can help maintain economic growth, which in turn can help to recover the employment levels observed before the pandemic. This can be an effective way to lessen the probability or depth of recessions in all countries and regions.”
