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Dhaka Tribune

ILO Global Wage Report 2018: Bangladesh’s gender wage gap lowest in the globe

Bangladesh is the only country in the globe, where the factor-weighted hourly wage gender pay gap is positive, the report said

Update : 26 Nov 2018, 10:06 PM

Gender wage gap in Bangladesh is the lowest in the globe, as it came down to 2.2% last year against the world average of 21.2%, a report of the International Labour Organization (ILO) said on Monday

The “Global Wage Report 2018”, released on Monday revealed the data on gender pay gap based on global, regional and national wage trends in 136 countries.

Bangladesh is the only country in the globe, where the factor-weighted hourly wage gender pay gap is positive, the report said. 

The gender pay gap is a widely used as an indicator, representing the difference on overall pay between women and men employees.

The report also evaluated some reasons for slow wage growth despite a general fall in unemployment and recovery in GDP.

“The gender pay gap represents the current greatest manifestation of social injustice, and all countries should try to understand what lies behind them and accelerate progress towards gender equality,” said ILO Director-General Guy Ryder.

To reinforce the achievement of the SDG target 8.5, the ILO, together with UN Women and the Organisation for Economic Cooperation and Development (OECD), established the Equal Pay International Coalition (EPIC), an initiative to accelerate the closing of the gender pay gap across the world. 

The success of our efforts is crucial because inequalities within and among countries, including wage inequality, continue to be a significant obstacle to achieve a better and more sustainable future for all, he added.

According to the report the global average monthly gender pay gap was 21.2% in 2017, while Bangladesh gender pay gap was only 2.2%, the lowest in the world. Pakistan topped the gap chart by 43.8%. Bangladesh and Pakistan belong to upper-middle income group and average gender gap of the group was 21.4% in the year.    

Among the high income group countries, the average gender pay gap was 18.3% in 2017, with Belgium at the lowest showing 6.3%, while Korea was on the top with 28.3%. 

Among the upper middle income group, the average gender pay gap was 22.6%, where South Africa topped the chart with 31.1% and Thailand at the bottom with 11.3%.

Nepal topped the low income group with 26.7% gap and the average gender pay gap is 21.2%. 

In hourly gender pay gap list, Bangladesh scored negative, which means that Bangladesh is the only country that remains in the positive territory.  Hourly wage indicates the wage of part time worker.      

“Only one country (Bangladesh), the factor-weighted mean hourly wage gender pay gap is positive,” said the report. 

It is striking that all but four of the countries including Australia, Bangladesh, China, and the Russian Federation, the gender pay gap is positive at the point of entry into the labour market, said the report. 

“In part time jobs or hourly based payment, the employers prefer to recruit women due to the nature of the job and offer better wages. As a result, they can earn a better wage reducing the pay gap, Centre for Policy Dialogue Research director Khondaker Golam Moazzem told the Dhaka Tribune. 

In monthly wage or permanent jobs, men are given priority than women where the gender wage gap is higher compared to monthly wage payment, said Moazzem. 

Currently, Bangladesh is creating low end large scale jobs, where there is a little difference between men and women in terms of skill. As a result, women get job opportunities and the wage difference is comparatively lower here, he added.  

But there is apprehension in increasing the wage gap that if women fail to become a skilled work force in line with the economic development and technological up-gradation they won’t be able to avail the jobs, said the economist.    

Participation of jobs in managerial positions is lower than men, which is another challenge.  

Real wage growth declines 

Last year, the global real wage growth saw a negative growth but Bangladesh’s real wage growth has seen a 3% rise. The growth rate declined in comparison to the previous year.

Global wage growth in 2017 fell to its lowest rate since 2008, far below the levels before the global financial crisis. 

“It is puzzling that in high-income economies we see slow wage growth alongside a recovery in GDP growth and falling unemployment rate, while early indications suggest that slow wage growth continues in 2018,” said Ryder.

 “Such stagnating wages are an obstacle to economic growth and rising living standards. Countries should explore, with their social partners, ways to achieve a socially and economically sustainable wage growth.”

The report finds more a robust wage growth in the low- and middle-income countries, with much diversity across countries and regions. 

Bangladesh’s real wage growth was 3% in 2017, which was 3.6% in the previous year. 

Workers in Asia and the Pacific have enjoyed the highest real wage growth among all regions over the period from 2006 to 2017, said the report. Even here the wage growth was lower in 2017 than in 2016, falling from 4.8% in 2016 to 3.5% in 2017.

At present, employment is not friendly to higher wages because the salary is not increasing as expected.  The large scale investment has been creating basic jobs instead of technology driven mid-level ones where, young and educated people can join to earn better wages, said Moazzem. 

As a result, the real wage growth is not increasing, he added.

Wage growth also declined in Central and Western Asia, from 3% in 2016 to 0.5% in 2017.

However, in emerging and developing countries of the G20, real wage growth is fluctuating in recent years, rising from 2.9% in 2015 to 4.9% in 2016, and then falling to 4.3% in 2017.

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