On December 6, 2016, the Hay Group Division of Korn Ferry released a report giving its take on global wage growth over the past year and predicting what we can expect in 2017. We put together a summary of the Hay report, a sort of wage growth – top and bottom countries list. We think it gives a good picture of where we can expect global wages to shake out in 2017. We will give you a hint: North America is towards the bottom of the list.
1. Asia
Experts expect real wages in this region to rise the highest among global countries with an average of 4.3%. The country with the highest increase in wages is Vietnam at 7.2%. The Hay report says that Thailand workers can expect wage increases of 5.6%, Indonesian workers 4.9% and Indian workers 4.8%. The greatest change, however, is in China where observers expect real wage increases to rise 4%, down from last year’s increase of 6.3% (a decrease of 2.5%). Hay Group says this also means China can expect slower growth in the future.
2. Middle East
Workers in Middle Eastern countries can celebrate the New Year with happy anticipation. Forecasters expect a 4.5% rise in wages there. With an inflation rate of 2.0%, this region will see real wage increases of 2.5%.
The highest wage increases in the region will go to Lebanon at 6.1% and Jordan at 6.3%. The UAE will see the slowest wage growth (.5%), which is a .4% decrease from last year’s wage increase of .9%.
3. Europe
Hay Group anticipates that the UK wage increases will stay at 2.5%, exactly where they have remained for the last three years running. When the wage increase of 2.5% adjusts for inflation (.6%), UK workers can expect to see a real wage increase of 1.9%.
Workers in France and Germany can expect wage increases of 1.5% and 2.2%, respectively.
Eastern Europe’s inflation rate is 3%. The average wage increase is 5.1%, which when adjusted for inflation, means the real wage increase is around 2.1%.
4. North America
Experts expect that North America will see a wage increase of 2.8% which is the same as the wage increase last year. When we adjust for inflation, the real wage increase is only 1.4%.
In the US, predictions are that the wage increase will reach 3%. After adjusting for a 1.1% inflation rate, the real wage increase will reach 1.9%.
Canadian workers can expect salary increases of 2.5%. After adjusting for an inflation rate of 1.6%, Canada’s real wage increase is .09%.
5. Pacific Region
Workers in the Pacific Region can expect an average increase in wages of 2.8% after an adjustment for an inflation rate of 1.8%.
Australia will see a 3% wage increase, adjusted by an inflation rate of 1.4%, which yields a real wage increase of 1.6%.
In New Zealand, experts say the wage increase will reach 2.5%, then an adjustment for an inflation rate of .6%, yields a real wage increase of 1.9%.
6. Latin America
The economic troubles in Latin America and an inflation rate of 5.9% will reduce the expected wage increase of 7% to a low of 1.1%.
In Columbia, workers can expect a 6.8% increase in wages but also a 7.6% inflation rate. That means the real wage will decrease 0.8%.
In Brazil, forecasters expect wages to increase 8.8% but inflation is 8.4%. That means the real wage increase will only reach .4%.
In Argentina, experts say a 41% inflation rate will negate the expected 28.5% wage increase.
According to Bloomberg, Venezuela is the worst situation for workers in Latin America. Inflation is at 485% compared to an expected wage increase of 111%. If you exclude Venezuela and Argentina from the discussions, the average real wage increase in the region will reach 1.1%.
7. Africa
Africa’s workers can expect a high average wage increase of 6.4% but a high inflation rate of 5.7% will bring the real wage increase down to .7%.
Egypt expects a decrease of -.03% in real wages due to high inflation. Algeria, too, will see negative wage change of -1.1% due to high inflation rates.
To learn more, you can read AllAfrica.com’s article entitled“Africa: Slowing Global Wage Growth for Fourth Straight Year ‘Greatly Concerning,’ Says UN Labour Agency”which was an inspiration for this post.
