• In the last 34 years, whilst the major European Union economies, Canada, South Korea and Japan surpassed, eliminated or experienced a very significant reduction of their PPP wage gaps –equalised with the wages of equivalent production counterparts in the U.S. manufacturing sector, Mexico moved in the opposite direction and exhibits a remarkable consistency in the deliberate State policy of wage pauperisation of Mexican workers.
  • In the four €uro area economies, real wages have increased their true value relative to equivalent U.S. wages. This is especially true since the adoption of the €uro in 2001 as a result of a planned process of convergence. While in the 1990s the four countries increased their gaps, they reduced them in the last decade. Germany and Italy, in particular, now have wages with greater purchasing power than U.S. wages. Overall, despite the current global economic crisis, their living-wage equalisation indices are still in a better position than in the 1990s, albeit they have begun to deteriorate. As for the UK, it recorded a steady decrease of its wage gap, but has now backtracked to the same equalisation level of 1995. Canada had consistently improved its equalisation level since 1975 and gained a competitive advantage vis-à-vis the U.S. since the late 1980s, but the global crisis has taken its toll, and now, as with the UK, it is back in the range prevalent in the early 1980s.
  • After an impressive reduction of its living wage gaps since 1975, South Korea has been losing considerable ground since 2007, and while it remains close to the equalisation levels of European economies, it has returned to the levels recorded in the late 1990s. Its living-wage gap increased from 17% in 2007 to 35% in 2009.
  • In the case of Mexico, despite the benefit of a change in the primary data source applied by the U.S. BLS –which eliminates manufacturing outlets with 15 employees or less, it remains stalled with a huge gap of 77 points, confirming once again the exploitative nature of the Mexican State. Thus, every year we need to point out that Mexico is the only country where wage equalisation is dramatically below the level recorded more than a quarter century ago. Moreover, it must be stressed that Mexican manufacturing real wages continue to be by far the most undignified of all countries assessed and they are light years away from equalisation.
Chart LG2: 1975 – 2009
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