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A new report by the International Labour Organization (ILO) says severe inflationary crisis around the world combined with a global slowdown in economic growth – driven in part by the war in Ukraine and the global energy crisis – is causing a striking fall in real monthly wages in many countries.

The report estimates that global monthly wages fell in real terms to minus 0.9 per cent in the first half of 2022 – the first time this century that real global wage growth has been negative.

The crisis is reducing the purchasing power of the middle classes and hitting low-income households particularly hard, says ILO in a statement.

According to the report, among advanced G20 countries, real wages in the first half of 2022 are estimated to have declined to minus 2.2 per cent, whereas real wages in emerging G20 countries grew by 0.8 per cent, 2.6 per cent less than in 2019, the year before the COVID-19 pandemic.

“Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained,” said ILO Director-General, Gilbert F. Houngbo.

The report says well-designed policy measures are needed urgently to prevent the deepening of existing levels of poverty, inequality, and social unrest.