Economic Growth

Which OECD countries are facing the sharpest falls in real wages?

In the United States, the average decline in real wages for the entire population - across all sectors and income levels - was just over 2 percent year-on-year in the third quarter of 2022.

In the United States, the average decline in real wages for the entire population - across all sectors and income levels - was just over 2 percent year-on-year in the third quarter of 2022. Image: Unsplash/Jason Leung

Martin Armstrong
Data Journalist, Statista
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Economic Growth?
The Big Picture
Explore and monitor how Economic Progress is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Economic Progress

  • There may have been wage increases in sectors this year, but due to inflation overall increases will remain below the rise in consumer prices in many countries.
  • The war in Ukraine has drastically increased prices, and global financial conditions have tightened substantially this year.
  • The chart shows the average decline in real wages for countries, as several factors including, inflation and social protection measures explain the differences between countries.

Wages are rising, but they are not keeping up with inflation. While pay negotiations may have resulted in wage increases in several sectors this year, overall increases will remain below the rise in consumer prices in many countries, as confirmed by data released by the OECD in its macroeconomic report.

The war in Ukraine has significantly increased prices, particularly for energy, adding to inflationary pressures at a time when the cost of living was already rising rapidly around the world. As a result, global financial conditions have tightened substantially this year and the outlook for labor markets remains uncertain. In most OECD countries, average wage growth has been slower than inflation, reducing household purchasing power despite government measures to mitigate the impact of soaring food and energy prices.

As our infographic shows, Switzerland is for the time being one of the few economies analyzed that seems to have been spared. In the United States, the average decline in real wages for the entire population - across all sectors and income levels - was just over 2 percent year-on-year in the third quarter of 2022. In Europe, Germany and Spain saw even more pronounced declines in purchasing power, with real incomes falling by just over 4 percent and 5 percent, respectively, nationwide. Several factors explain the differences between countries, such as differences in exposure to inflation, but also in social protection measures.

A graphic showing where real wages are falling the most in different countries.
Where real wages are falling the most in different countries. Image: Statista.
Discover

Beyond GDP: read the full transcript here

Have you read?
Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Economic GrowthFinancial and Monetary Systems
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Migration is a global strategic asset. We must not undermine it

Marie McAuliffe

May 29, 2024

1:54

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum