Global Wage Growth Has Dropped 33% Since 2012 Affecting the Poorest Countries the Most

Wage growth has been a contentious issue in the United States since the end of the most recent recession, but elsewhere throughout the world, things are looking a lot worse.

Since 2012, global wage growth has slowed down significantly, dropping from 2.5% annually to 1.7%. Removing the United States and China from the figures drops it to an anemic .6% growth rate. One or two more years on the same track and we could see wage growth actually slip into negative territory.

While countries such as the U.S. and Germany are able to survive temporary wage growth downswings relatively unscathed, economies of countries in SE Asia and sub-Saharan Africa are at an increased risk of slipping into a depression. In the past, lower wages would make a developing area more attractive for low-skilled labor positions, but with the rise of premature industrialization, about one billion people are at risk for never having the chance to rise above the $1.50/day earning level.

When general economic downturns occur, you can usually see the warning signs in developing countries first. This is what we are seeing right now as wages stagnate across the board, but especially so in areas with citizens who can ill-afford to see their wages drop in real terms the most.