A report issued by the International Labor Organization (ILO) stated that high inflation rates and negative wage growth exacerbate the cost of living crisis, which hits lower-income workers and women to a greater degree than other groups.
It is noteworthy that wage growth becomes negative when the rate of increase in wages is less than the rate of inflation, which means that the real wage of the worker decreases and does not increase.
Bloomberg, a US News Agency indicated that the report highlights the serious discrepancy between global inflation rates, which the IMF expects to reach 8.8% by the end of the year, and the decline in real wages for workers, which fell during the first half of this year by 0.9%.
According to the international report issued on Wednesday, this clearly indicates that nominal wages in many countries were not adjusted in sufficient proportions during the first half of this year to compensate for the increase in living expenses.
"In the absence of appropriate policy responses, the near future could witness a sharp decline in the real incomes of workers and their families with an increase in inequality, which threatens economic recovery and may spark social unrest," the ILO report added.
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