If you are depressed because of the rapid rise in inflation and salary cuts in disguise, the only consolation may be that many people around the world are accompanying you on this road of belt tightening. But if you are allowed to work 4 days a week, is it acceptable to not get a raise?
The International Labor Organization (ILO, International Labor Organization), a subsidiary of the United Nations, recently announced that in the first half of 2022, the global average monthly real wages after deducting inflation will drop by 0.9% year-on-year. The standard of living fell.
Wage cuts in disguise are the most severe in developed countries. In the G20 economies, which account for 60% of the world’s workforce, real wages fell by 2.2% in the first half of the year. Real wages in the US and Canada went from zero growth last year to a 3.2% drop in the first half of this year. Japan, which has been lost for 30 years, the data released by the Ministry of Health, Labor and Welfare on December 6 also showed that after taking into account rising prices (Japan’s October inflation was 3.6%, a 40-year high), the real wage in October was higher than that of the same period last year. The decrease was 2.6% , which was a year-on-year decline for 7 consecutive months, and it was the first time that it exceeded 2% since the change from rising to falling in April. Based on the fact that the problem of high global inflation is not expected to be alleviated in the short term, it seems inevitable that everyone will be forced to cut wages throughout the year. The difference is who cuts more.
Rosalia Vazquez-Alvarez, one of the authors of the ILO report, said global productivity growth (measured by output per worker) has outstripped wage growth this year by a gap of 12.6 percent, the largest since 1999. In other words, wage earners perform harder and better, but the money return not only does not increase at the same time, but is going backwards.
However, how easy is it to strive for wage growth to catch up with inflation? Taking the UK as an example, as of the quarter ended September, the annual salary growth rate of private companies in the UK excluding bonuses rose to 6.6%. However, the inflation rate in the UK in October was 11.1%, a 41-year high. With major central banks all over the world talking about avoiding the nightmare of a wage-price spiral (wage-price spiral) becoming a reality, will the inflation crisis require wage earners to “pay the bill” again ?
The Times pointed out that another possible way out is to switch to a four-day work week while maintaining the same salary. NGO “4 Day Week Global launched a 4-day work certification program, and more than 100 British companies have participated. The program is divided into gold and silver standards, which can prove that employees work 32 days a week. Businesses that work 35 hours a week are certified as the gold standard, and those that work 35 hours a week are the silver standard. Joe Ryle, president of the organization, said that many businesses cannot afford a 10% inflation wage increase, and a 4-day work week with no pay cuts is a viable option. Instead, he hopes that by the end of the century, the four-day workweek will be the norm.