Income from Work Falls, Inequality Rises

Labor inequality is growing: the share of labor income is stagnating, and a large proportion of young people remain outside the labor force, education, or training. This is written in the September 2024 update of the International Labor Organization’s (ILO) World Employment and Social Outlook.

The study shows how the global share of labor income, that is, the portion of total income earned by workers, fell by 0.6 percentage points from 2019 to 2022 and has remained flat since then, compounding the downward trend that has been in place for some time. Among the drivers of this fall is the covid pandemic, with nearly 40% of the decline in the labor income share occurring in the pandemic years (2020-2022). This has exacerbated existing inequalities: capital gains are increasingly concentrated among the rich, jeopardizing progress on Sustainable Development Goal 10, which instead aims to reduce inequality both within and between countries.

The ILO concludes that the global labor income share is 52.3%, which is insufficient to achieve the Sustainable Development Goals. Even if technological advances and automation have boosted productivity and economic growth, workers have not benefited from this growth and actually risk seeing an even worse situation with the development of artificial intelligence, which threatens to further increase inequality.