A recent United Nations report advocates for a significant shift in how workers are compensated. The report calls for governments to establish pay caps in ‘destructive industries,’ such as finance trading and fossil fuel excavation, while increasing wages for essential workers, including those in healthcare and sanitation.

UN Special Rapporteur on extreme poverty and human rights, Olivier De Schutter, emphasized the need to rectify this injustice and change the status quo.

The report highlights a sobering statistic: one in five workers worldwide lives in poverty. 

Many of these individuals hold crucial societal positions, working in areas like food production, transportation, cleaning, and sanitation. 

Despite their vital roles, they often earn only the minimum wage in their respective countries, which, given the rising inflation and stagnant wage growth, often leaves them in poverty.

The UN’s research reveals that global monthly wages experienced a real-term decline of 0.9% in the first half of 2022, marking this century’s first negative global wage growth.

Over the past two decades, workers’ ability to negotiate for better pay has notably weakened. Many are trapped in precarious, temporary, or ‘gig economy’ jobs, making it challenging for unions to advocate for improved compensation. 

The threat of offshoring production to low-wage jurisdictions further hampers employees’ bargaining power.

De Schutter stressed the global competition that often leads to a ‘race to the bottom’ in wage standards. Relying on keeping workers in poverty is not a viable strategy for countries in this competitive landscape.

The UN report points out that minimum wages in many countries often fall short of providing a living wage, as they do not align with the true cost of living. For example, in China, the monthly minimum wage varies from $240 to $380, while estimates suggest that a true living wage for a single Chinese adult would range from $360 to $585.

The report suggests that a living wage should enable a worker and their family to maintain a decent standard of living or correspond to at least 60% of the median wage in the country, whichever is higher.

The report calls for a shift in the way workers are compensated. 

Workers are often rewarded based on their economic value rather than their contributions to society. 

Care work, historically performed without pay within households and predominantly by women, is a prime example of this disparity.