ILO: Global labor income share is decreasing, inequality is increasing.

The International Labour Organization (ILO) reported that the 0.6 percentage point decrease in global labor income share between 2019 and 2022 has increased inequality and made progress towards the United Nations' sustainable development goals more difficult. ILO has updated its "World Employment and Social Outlook 2024" report.



The report states that the global labor income share has continued its long-standing downward trend, decreasing by 0.6 percentage points between 2019 and 2022, and that workers' share of the global income pie has significantly decreased over the past 20 years. The report also notes that the global labor income share has decreased by 1.6 percentage points since 2004, which may seem like a small decrease in percentage points, but it corresponds to a $2.4 trillion annual shortfall in labor income this year.



The report highlights that the COVID-19 pandemic has caused a significant decrease in global labor income share and worsened existing inequalities. It emphasizes that global crises have further exacerbated existing inequalities within and between countries, hindering efforts to reduce inequality, which is a focus of the 10 Sustainable Development Goals (SDGs).



The report states that "the COVID-19 pandemic has exacerbated existing inequalities, particularly due to the increasing concentration of capital income among the richest, and has undermined efforts to reduce inequality within and between countries, which are the focus of the 10 SDGs." It also mentions that currently, workers only receive 52.3% of the global income, while capital income makes up the rest, and that technological advancements have played a role in the decrease in labor income share.



The report warns that the recent surge in artificial intelligence poses a risk of further deepening inequality. It states that "if historical patterns continue and there is not a stronger policy response across a wide range of relevant areas, recent developments in productive artificial intelligence could exert further downward pressure on labor income share." The report also highlights the ongoing issue of young people who are not in employment, education, or training, noting that the proportion of these young people has decreased from 21.3% in 2015 to 20.4% in 2024.



Celeste Drake, Deputy Director-General of the ILO, stated in her assessment of the issue that countries need to take action to address the risk of decreasing labor income share. She emphasized the need for policies that promote the fair distribution of economic benefits, including freedom of association, collective bargaining, and effective labor management, in order to achieve inclusive growth and build a path towards sustainable development for everyone.