GENEVA — Wages in the U.S. textile products mills industry have experienced the biggest declines in the U.S. economy, according to a global wage report published Tuesday by the International Labor Organization.
This story first appeared in the November 4, 2009 issue of WWD. Subscribe Today.
ILO analysts noted between August 2008 and August 2009 average weekly wages in textile product mills dropped 6.2 percent from $460.60 down to $431.97.
Between August 2008 and August 2009, average weekly wages in U.S. textile mills contracted by 3.19 percent to $525.40 in August 2009 from an average of $542.70 in August 2008.
However, the fall in average weekly wages in the U.S. apparel industry dipped by only 0.76 percent to $407.40 from $410.50, ILO experts said.
Average wages in the U.S. and other major economies have posted significant declines since the beginning of 2009, and the situation is “likely to get worse” despite the possibility of economic recovery, the global report predicts.
“The continued deterioration in real wages worldwide raises serious questions about the true extent of an economic recovery, especially if government rescue packages are phased out too early,” warned Manuela Tomei, work and employment chief at the ILO.
The dramatic hike in unemployment figures in some countries is also expected to put more downward pressure on wages, ILO analysts said.
“This greatly suggests there will be greater pressure on wages in the future as more people will be unemployed, and more looking for jobs, and the pressure on employers to increase wages to attract workers will decline,” said Patrick Belser, economist at the ILO.
In the U.S. since the beginning of 2009 “monthly wages have declined by almost 2 percent,” Belser said.
The downward slide in wages worldwide, said Belser, raises questions “about the ability of workers and their families to sustain consumption,” especially if government stimulus packages are terminated too early.
With regard to the U.S. alone, Belser said, the ILO estimates that “every 1 percent growth in nominal wages corresponds to about $60 billion that workers and their families can spend on consumer goods and services.”
The ILO study found that, in the first quarter of 2009, real monthly wages fell in more than half of the 35 countries for which recent data are available. Similarly, data from 22 countries indicate the crisis has adversely impacted women’s wages.
“On average the gender pay gap has frozen with women’s earnings about 80 percent of men’s wages, interrupting the long-term trend to more gender equity,” the study said.
In the U.S., women’s wages declined in 2008 to 79.9 percent of men’s wages from 80.2 percent in 2007, it said.
Moreover, in 2008, the study concludes that data from 53 nations show global growth in average wages slowed down to 1.4 percent from 4.3 percent in 2007, but adds that already more than a quarter of the countries experienced flat or falling monthly wages.