Salaries in Belgium fall

Salaries in Belgium fall

Despite the tight labour market, real wages in Belgium fell by 0.3 percent in 2017. This is based on a new report by the International Labour Organisation (ILO).

Across Western Europe, real wage growth dropped, from 1.6 percent in 2015 to around zero in 2017. There was lower wage growth in France and Germany, among others. Wages also shrunk  in Italy and Spain.

The ILO found this remarkable, as the economy has recovered in recent years and unemployment has also fallen steadily. The fact that this does not translate into higher wages may be due to slower productivity growth, less bargaining power for employees, uncertain economic prospects and more global competition, among other reasons. It is possible that unemployment figures do not always reflect the true state of the labour market, according to the report. In Eastern Europe, however, wages grew by 5 percent in 2017.

“It’s puzzling that in high-income economies we see slow wage growth alongside a recovery in GDP growth and falling unemployment. And early indications suggest that slow wage growth will continue in 2018,” said ILO Director-General Guy Ryder. “Such stagnating wages are an obstacle to economic growth and rising living standards. Countries should explore, with their social partners, ways to achieve socially and economically sustainable wage growth.” 

The ILO also looked at income inequality in 64 countries, which together account for three quarters of employees worldwide. This shows that, after Sweden, Belgium had the second lowest income inequality in the world.

Belgium also has a fairly limited gender gap compared to its neighbouring countries. Yet, in the case of higher incomes, there is still a significant disparity in the remuneration of men and women in the Kingdom. Among the 20% who earn the least, the gap is 3%. For the 20% with the highest incomes, the gap is 13%.

In some countries, the gender gap has been reversed. In countries such as the Philippines and Costa Rica, women earn more per hour than men.

“The gender pay gap represents one of today’s greatest manifestations of social injustice, and all countries should try to better understand what lies behind them and accelerate progress towards gender equality,” said Guy Ryder.

Arthur Rubinstein
The Brussels Times

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