Overall, seven out of the twelve countries in this assessment are better off in 2016 than in 1996. Brazil shows no change and Canada, Mexico, Germany and the UK are worse than in 1996. East Asian economies record the greatest gains in their wage-rate position. Singapore and South Korea have recorded the most improvement in the reduction of their wage gaps since 1996. In contrast, Canada has recorded the greatest decline, followed by the United Kingdom. Both remain at their lowest point since 1996. Germany continues to have the best position with an actual advantage vis-à-vis the U.S. in PPP wage rates. Yet it remains with an index eight points below its best position.

South Korea has not been able to resume its wage-gap reduction trend. It instead increased it in 2014 to then stall after that. Yet after Singapore, it has reduced its gap the most since 1996. Japan has also stalled since 2012. Singapore in contrast has been able to sustain a wage-gap reduction trend and now has the smallest gap in the region and its smallest ever.

The UK has been steadily losing ground since its best position in ’06 and in 2016 remains at more than double (33% vs 14%). This is the widest wage gap recorded by the UK for the entire 1996-2016 period. Canada’s wage-rate gap has deteriorated dramatically and it is has increased its gap 15 points since 1996, its worst ever. Australia experienced a drastic increase of its wage gap, increasing it by eight points since 2014 and it is now almost at the same position as in 1996.

Among the euro-area countries, despite the euro devaluation against the dollar, France, Italy and Spain have reached a plateau at their smallest or close to their smallest wage gap since 2012. Germany has also stalled, but unlike the other economies, it has done it ten points below its best level, recorded in 2000. Despite the stagnation trend, Italy was able to remain at its best position in 2016.

Brazil’s prolonged recession has impinged on its wage gap, increasing it by two points since 2014 to a 67 point gap in 2016, the same as in 1996.

Mexico’s track record since 1996 (and since 1985 if we look back at production-line hourly wages) exposes a deliberate State policy of maintaining real wages at the level of modern-slave-work wages. The government’s survey data was improved in 2016 to include all manufacturing units. This has caused indices to drop 25% on average. For instance 2014 was recalculated from a 27 index to a 20 index. Consequently the wage gap is actually much greater than what was being reported and it is now as low as in China, with the difference that China has been increasing real wages steadily. With Mexico there has been virtually no change in equalisation terms for the entire twenty-year period. This makes Mexico, barring the Philippines, the country with the worst living-wage equalisation position of the 34 countries in the three regions of our living-wage gap assessments.

Chart LG2: 1996 – 2016
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