China bucks the falling wage growth trend

It's now official: workers around the world are falling behind. The International Labor Organization's latest Global Wage Report finds that, excluding China, real (inflation-adjusted) wages grew at an annual rate of just 1.1 percent in 2017, down from 1.8 percent in 2016. That is the slowest pace since 2008.

In the advanced G20 economies, average real wages grew by a mere 0.4 percent in 2017, compared with 1.7 percent in 2015. While real wages were up by 0.7 percent in the United States (versus 2.2 percent in 2015), they stagnated in Europe, where small increases in some countries were offset by declines in France, Germany, Italy and Spain. The slowdown in "success stories" such as Germany and the US is particularly surprising, given the former's expanding current account surpluses and the latter's falling unemployment and tight labor markets.

In emerging markets, average wage growth in 2017, at 4.3 percent, was faster than in the advanced G20 economies, but still slower than the previous year (4.9 percent). Asia enjoyed the fastest real wage growth, owing largely to China and a few smaller countries such as Cambodia, Sri Lanka and Myanmar. But, overall, wage growth in Asian economies mostly decelerated in 2017. And in Latin America and Africa, several countries experienced real wage declines.