Proposal preview

Wages and waves of globalisation since 1930/1950: convergence, inequalities, strategies

Wages are an essential element of economic and social life as today one in every two economically active persons in the world is an employee paid by wage and the global payroll represents around 40% of global GDP. Globalisation has effects on prices, costs and incomes and this aspect is less often discussed.

However, by taking only the average wage, the disparities in wage levels in the world are considerable. The gap (PPP) between developed countries and the major emerging countries is 1 to 3, with all developing countries 1 to 7.5, and with the LDCs 1 to 20. Within the continents, disparities are also very present : e.g. Europe is divided into four or five different development subgroups and the gap is currently rated 1 to 6 in nominal and 1 to 3 in PPP.

As preliminary remarks, is any statistical dispersion always disparity and any disparity a sign of inequality? In this case, it seems necessary to compare the nominal average deviation or PPP with other indicators such as: wages Gini index, gender wage gap, low wages rates, interdecile ratio D9 / D1 etc. Then, it seems pertinent to consider the contemporary paradox of the unity of commodity prices and the multiplicity of labour prices (according to the respective levels of qualifications). In fine, we have to raise the question of international competition on labour and goods markets, questionning the role of labour costs in exports and the attractiveness of wages in advanced countries for potential migrants.

The main question for the session will focus on the average wage convergence in time (or not) and wage equalization inside individual states (or not). According to the (HOS) Heckscher-Ohlin-Samuelson model of equalization of factor prices (and taking into account its limitations), the ILO noted in the Global Wage Report 2014-15, p. 20, a convergence between national average wages since 2000. But earlier? Avoiding going back to the 19th century or earlier, we propose to start from the years 1950-1960. At least two periods emerge after 1950: between 1950 and 1980, wages in advanced economies have grown faster than those of the emerging countries and the situation is clearly reversed from the 1980s.

This kind of analysis supposes some conditions for relevant comparison: in advanced countries, wages currently account for 40/50% of GDP, 50/70% of household incomes, while 90% of the workforce are wage earners. In emerging countries these figures are: 35/40% of GDP, 40/50% of household incomes and 50% of the workforce. Furthermore, there are some important labour differences in both types of economies: e.g. the existence of unorganised economic sectors, the relative importance of rural manpower, the average qualification level of manpower and the presence or absence of social insurance etc.

On the other hand, the wage problematic also questions the policies and strategies concerning them and the session does not exclude papers or texts such as: public policies of wages, wage strategy of companies, industrial relations and wages.

Organizer(s)

  • Leonid Borodkin, Lomonossov State University Moscow , lborodkin@mail.ru , Russia
  • Michel-Pierre Chelini, Université d'Artois, Arras, chelinimp@noos.fr, France

Session members

  • Maria Camou, University of Republic, Montevideo, maria.camou@cienciassociales.edu.uy
  • Aomar Ibourk, University Cadi Ayyad of Marrakech, aomaribourk@gmail.com
  • Hwok-Aun Lee, ISEAS, University of Singapore, Singapore , howcan@gmail.com
  • Humberto Morales, Benemérita Universidad Autónoma de Puebla, hmoreno98@yahoo.com
  • Rekha Pande, Central University of Hyderabad, panderekha@yahoo.com
  • Clément Sehier, Université de Lille, LEM, clement.sehier@gmail.com
  • Call for Paper, Open,

Proposed discussant(s)

  • Bas Van Leeuwen, University of Utrecht/IISH Amsterdam, B.vanLeeuwen@uu.nl
  • Patrick Belser, ILO, Geneva, belser@ilo.org

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