GLOBAL WAGE REPORT 2008/9

The ILO’s first global wage report is published to discuss the major trends in the level and
distribution of wages around the world. It also reviews the roles of minimum wages and
collective bargaining and explores how to develop a coherence policy in the area of wages.
This note summarizes its key findings and policy implications, focusing on the region of
Asia and the Pacific.

Overall, despite the positive wage growth in the region, there is an indication that wage
growth lagged behind economic and productivity growth. Inequality has also been on the
rise, without much progress in gender pay gap. Low coverage of collective bargaining
remains a challenge, and the current minimum wage system leaves much room for
improvements in many countries in the region. The outlook for 2008-9 is not bright,
particularly in the wake of global economic downturn. Tensions on wages are likely to
intensify, and the workplace may become more vulnerable to disputes. A coherent policy
approach to wages is essential and wage policies need to be complemented by effective
income support measures.

WAGE TRENDS

Sound economic growth until 2007. Recovering from the financial crisis of the late 1990s,
Asia and the Pacific, with a strong influence of China, had been a driving force of
globalization and witnessed relatively solid global economic growth until 2007. With this
economic achievement, the share of wage employment increased considerably, although
the ratio is still below the global average of 46.9 per cent. In East Asia, wage employment
was estimated to increase from 32.4 per cent in 1996 to 42.6 per cent in 2006.

Wages grew but tended to lag behind economic growth. This economic growth was
accompanied by positive growth in real wages in the region. Between 2001-2007, real
wages in Asia and the Pacific were estimated to growth at 2.9 per cent per year, while the
estimated global average stand at 3.2 per cent (the global median average was 1.9 per cent).
This overall average performance of the region in wage growth needs to be seen in
comparison to economic growth. In fact, in Asia and the Pacific, when GDP per capita
grew by an extra 1 percentage point, average wages increased by an extra 0.68 per cent.
This so-called wage elasticity of 0.68 indicates the possibility that real wage growth lagged
behind labour productivity. This estimated elasticity is also lower than the global estimate
of 0.75.

Wage share also fell. In line with relatively slow wage growth, there has been a downward
trend in the share of GDP distributed to wages, or the wage share. This trend has been
observed both industrialized countries (e.g., Japan and the Republic of Korea) and
developing countries (e.g., China, the Philippines, and Thailand). Yet this is not unique to
the region but commonly found across the regions. Globally, it is found that a 1% annual
growth of GDP has been associated with a 0.05% decrease in the wage share.

The trend in wage inequality reversed and increased. Asia and the Pacific had once been
praised for equitable growth where sustained growth was successfully combined with lower
inequality. However, this is not the case any longer. The Global Wage Report shows that,
while the overall share of GDP taken by workers as a whole decreased, the division of this
smaller share between individual workers has also become more unequal. Wage inequality
increased in most countries in the region for which data are available. The increases were
particularly sizable in China, the Republic of Korea, and Thailand. ** Globally, inequality
between top wages and bottom wages has increased in more than two thirds of the
countries considered in the report.

Gender pay gap has narrowed down, but too little. Globally, the pay gap between genders
is still high and closing only very slowly. Although about 80% of the countries for which
data are available have seen an increase in the ratio of female to male average wages, the
size of change is small and in some cases negligible. In a majority of countries, women’s
wages represent on average between 70% and 90% of men’s wages, but it is not
uncommon to find much lower ratios (50-60 %) in some parts of the world, particularly in
Asia.

MINIMUM WAGES AND COLLECTIVE BARGAINING

Collective bargaining on wages remains limited. Collective bargaining coverage in Asia

and the Pacific remains very low. The overwhelm majority of countries in the region has
coverage rate lower than 15% so that the impact of collective bargaining on wages is very
limited. This may explain why wage elasticity for Asia and the Pacific is lower than the
global estimate. In fact, the Global Wage Report finds that higher coverage of collective
bargaining is associated with higher wage elasticity (or stronger relationship between wage
increases and economic growth) and lower wage inequality. For instance, in “high
coverage” countries (defined as coverage above 30% of employees), the wage elasticity is
estimated at 0.87, while it is much lower at 0.65 for countries with lower coverage.

Minimum wages gained more importance. Partly reflecting the relative weakness of
collective bargaining in the region, increasing importance has been attached to minimum
wages, especially in the context of sluggish wage growth and widening inequality. Its role
in protecting low-paid workers and alleviating poverty is well recognized. Globally, it is
estimated that, over the period of 2001-2007, minimum wages in real terms were raised by
an average of 5.7 per cent per year. This strong growth is also the case in Asia and the
Pacific as a whole, but country variations are quite considerable. Some countries such as
China and Viet Nam have witnessed minimum wages (in real terms) growing at higher than
8 per cent per year, whereas minimum wages fell in other countries such as Thailand. In
some other cases such as India and Pakistan, minimum wage system has not worked as
intended.

However, there are also challenges for minimum wages. Minimum wages have also
attracted much debate involving conflicting views. The government and the social partners
have been struggling to agree on the level of minimum wages (e.g., Indonesia and Viet
Nam), and there are also concerns about the possibility that minimum wages are used as a
substitute for collective bargaining (e.g., the Philippines). In other countries such as India,
the main concern, particularly for trade unions, has been how to revitalize the allegedly
ineffective minimum wage system. The complexity of the minimum wages system which
sets up a complicated list of minimum wages for sector, occupation and region, has often
proved counterproductive as well. At the same time, a growing body of literature shows
that the adverse impact of minimum wages on employment (which is a prevalent concern
in Asia and the Pacific) has been exaggerated. Overall, in many countries in the region, the
current minimum wage system leaves much room for improvements.

Therefore, coherent policy design is essential. Good practices related to the design of a
complementary and coherent set of minimum wages and collective bargaining policies
include: 1) keeping the minimum wage simple and opting, whenever possible, for a
national minimum wage instead of complex sectoral and/or occupational minimum wages;
2) Trying to ensure that social benefits are, whenever possible, disconnected from the
minimum wage level – since this practice often prevents governments from increasing
minimum wages for fear of the adverse impact on social security budgets; 3) accompanying
minimum wages by credible enforcement mechanisms which involve labour inspectors as
well as social partners; and 4) extend the coverage to include vulnerable groups such as
domestic workers, who are often excluded from the protection of minimum wage laws.
This is particularly important in order to maximise the impact of minimum wages on
gender equality at the bottom of the pay ladder.

OUTLOOK

The outlook is not bright. Given the current global economic turmoil which is expected to
continue for years to come, the Global Wage Report expects that very difficult times lie
ahead for many workers in the region. Based on IMF’s recent downward revision to
economic forecasts for 2008-9, it is predicted that, in the region of Asia and the Pacific, the
average wage growth in real term is unlikely to exceed 1.8 per cent, with the possibility of
wage reduction in countries with low economic growth. This estimate is slightly lower than
the global estimate of 2.1 per cent. In addition, higher prices, although being alleviated in
recent months, remain a threat to erode real wages, particularly for low-paid workers.
Therefore, tensions are likely to intensify over wages, and the workplace may become more
vulnerable to wage-related disputes compounded by the pressure of employment
reductions.

What can be done? Firstly, social partners should be encouraged to negotiate ways to
prevent a further deterioration in the share of wages relative to the share of profits in GDP.
Interestingly, the recent decline in the wage share also tends to be accompanied by the
weakened capacity of translating economic growth into more jobs. Secondly, the levels of
minimum wages should be increased wherever possible to protect the most vulnerable
workers. Thirdly, minimum wages and wage bargaining should be complemented by public
intervention through income support measures, like food subsidy and cash transfer.

MINIMUM WAGE DETERMINATION

A system of minimum wages, whatever its form, cannot work unless it is based on regular,
reliable and timely statistics on a variety of data items, including income, wages, prices and
the characteristics of wage-earners (sex, occupation, skill levels, etc).

Six criteria, or groups of factors, to be taken into account in determining the level of
minimum wages, are set forth in Recommendation No. 135. They are:

Criterion 1: the needs of workers and their families;

Criterion 2: the general level of wages in the country;

Criterion 3: the cost of living and changes therein;

Criterion 4: social security benefits;

Criterion 5: the relative living standards of other social groups; and

Criterion 6: economic factors, including the requirements of economic development, levels

of productivity and the level of employment. This criterion also includes the capacity to
pay as indicated in Starr (1993).

TRENDS AND RECENT DEVELOPMENTS IN TCF

The textiles, clothing and footwear (TCF) industries are global; global inasmuch as
production activities are worldwide and connected through various arrangements and
strategic decisions to serve the world market; global in so far as trade, which is expanding
more rapidly than the average of the manufacturing sector, is highly influenced by the
changing characteristics of international competitiveness and the relocation strategies
implemented by global companies; and global because the geographical distribution of
world employment is affected by the rapid changes in production and trade. TCF industries
can be regarded, accordingly, as a “one-world employer”.

THE CHANGING STRUCTURE OF PRODUCTION AND TRADE

PRODUCTION TRENDS

World output of textiles has always been much greater in US dollar terms than world
output of clothing – which in turn has been much greater than world output of footwear.

In 1995 world textile output amounted to US$517 billion; world clothing output to US$336
billion; and world footwear output to US$60 billion. The ratios were therefore respectively
8.6 to 5.6 to 1. World output of textiles in 1980 was US$418 billion. Output fell between
1980 and 1985, rose by 27 per cent between 1985 and 1990 and registered a slight rise
between 1990 and 1995. In 1995 world textile output was 24 per cent higher, in US dollar
terms, than in 1980.

WORLD PRODUCTION OF TCF INDUSTRIES

More significant than the change in total output over the 1980-95 period was the change in
the distribution of output between regions. Between 1980 and 1995 the textile output of
Asia rose by 97.7 per cent, and that of the Americas by 76.3 per cent. But European output
fell by 32.4 per cent. Whereas in 1980 European output represented 53 per cent of world
output and Asian output 27 per cent, by 1995 Europe’s share had fallen to 29 per cent and
Asia’s share had risen to 44 per cent. The share of the Americas rose from 18 per cent to 25
per cent during that period.

World output of textiles continued to be dominant among the three sectors in the second
part of the 1990s. In 1998, it accounted for 55.9 per cent of the total value of output of the
three sectors, followed by clothing with 38.6 per cent and footwear with 5.5 per cent,
estimated at some US$485 billion (no data were available for Africa and Oceania, which
together account for about 2 per cent of world textile output). From 1995 to 1998, there
was a fall in the value of production (in US dollar) of 6.2 per cent, following a slight
increase of 1.3 per cent in the 1990-95 period. This decline was mainly due to a fall in the
value of production in Asia of more than 10 per cent during the period in question.

This decline was one of the consequences of the Asian financial crisis, and of substantial
falls in the value of a number of Asian currencies. Since China did not devaluate the yuan
during the 1995-98 period – and China dominates the textile output of Asia – the fall in the
value of Asian textile output was lower than it might have been.

Asia, which dominates the world production of textiles, saw its share in the world total
decline from 43.6 per cent in 1995 to 41.6 per cent in 1998. During the same period
Europe’s share remained unchanged (about 29 per cent), while the Americas increased its
share, to reach some 29.5 per cent of the world output of textiles in 1998 (figure 1.

WORLD EXPORTS OF TEXTILES AND CLOTHING

LONG TERM TRENDS IN EMPLOYMENT

THE CHANGING WORLD DISTRIBUTION OF EMPLOYMENT

In 1995 world textile employment was 16.8 million, clothing employment 8.7 million, and
footwear employment 1.8 million. The ratios were 9.3 to 4.8 to 1, respectively. These are
comparable with the ratios of 8.6 to 5.6 to 1 for the value of world output in 1995.

In 1998 world textile employment was estimated to be 16.4 million, clothing employment
11.2 million and footwear employment 1.7 million, making a total of 29.3 million. This
represented an increase of 7.3 per cent between 1995 and 1998, due to a dramatic increase
in clothing employment during this period.

WORLD EMPLOYMENT IN TCF INDUSTRIES

WORLD EMPLOYMENT IN TEXTILES 1995-98, BY REGION

Countries in: (in ‘000) % changes % share in total

1995 1998 1990-95 1995-98 1995 1998

Africa 595 478 –1.2 –19.7 3.5 2.9
America 1 355 1 247 –8.1 –8.0 8.0 7.6
Asia 11 627 11 914 17.2 2.5 69.0 72.5
Europe 3 207 2 733 –30.9 –14.8 19.0 16.6
Oceania 65 62 12.1 –4.6 0.4 0.4
Total 16 849 16 434 0.9 –2.5 100.0 100.0
 WORLD EMPLOYMENT IN CLOTHING 1995-98, BY REGION

Countries in: (in '000) % changes % shares in total

1995 1998 1990-95 1995-98 1995 1998

Africa 507 570 12.5 12.4 5.8 5.1
Americas 1 531 1 283 –11.1 –16.2 17.6 11.4
Asia* 3 895 6 976 –1.4 79.1* 44.7* 62.2*
Europe 2 724 2 393 –35.2 –12.2 31.3 21.3
Oceania 47 - –18.8 - 0.5 -
Total 8 704 11 222 –16.2 28.9 100.0 100.0

TWENTY PRINCIPLE WORLD EMPLOYERS IN TEXTILES, 1998

Ranking Countries Employees ('000)

1 China 7 672.4
2 India 1 470.5
3 Bangladesh 679.1
4 United States 588.0
5 Indonesia 515.4
6 Russian Federation 495.0
7 Japan 432.0
8 Italy 341.1
9 Pakistan 279.6
10 Thailand 257.5
11 Korea, Republic of 248.8
12 Mexico 240.0
13 Turkey 227.5
14 Egypt 223.0
15 Brazil 188.0
16 Taiwan, China 159.4
17 Romania 159.0
18 Spain 151.4
19 United Kingdom 146.9
20 Germany 141.2
LABOUR COST IN TEXTILE INDUSTRY

Labour costs in the textile industry are generally higher than those in clothing and footwear
production. Workers are paid higher wages, on account of the greater skills requested for
the production of textiles and the higher value added of production per employee (higher
labour productivity). On the other hand, in capital-intensive textile production, the
proportion of labour costs in total manufacturing costs is lower than in clothing and
footwear. In the European Union, for example, the estimated average proportion of labour
costs in total production costs – excluding the value of raw materials – is about 60 per cent
in the production of clothing and up to 40 per cent in textiles.

At the level of world regions, average hourly labour costs in the textile industry are
substantially different. In 1998, the average hourly labour cost in European countries
(around US$15) was more than double the level of countries in Asia and three times that of
countries in America. Within the regions, labour costs are considerably higher in
industrialized than in developing countries and countries in transition.

COMPARISON OF LABOUR COST IN TEXTILE INDUSTRY

The contrast is particularly obvious between Japan (with a labour cost per hour of more
than US$20) and the rest of Asia where the average labour cost is around US$3.5. It is also
marked between Western European countries (with an average of US$17) and Central and
Eastern European Countries (with an average of US$1.8). Even within developed countries
belonging to the same economic bloc, the situation remains contrasted. European Union
labour costs in the textile industry in 1998 were lowest in Portugal at US$4.51 per hour,
after Spain and Greece. At the opposite end, Denmark with US$23.10 per hour recorded
the highest labour cost.

The evolution of labour costs in textiles, in terms of US dollars, also varied from region to
region and from country to country during the period under review. The highest increases
in hourly labour costs over the 1980-98 period were registered in Asian countries, where
labour costs in 1998 were almost four times as high as in 1980. European and African
countries followed, with increases of 150 per cent and 120 per cent, respectively. It is
interesting to note that labour costs in the United States did not increase by more than 25
per cent over the period. Europe experienced its highest labour cost increases between 1985
and 1990, while Asian labour costs increased most during the 1990-98. It is also interesting
to note that some newly industrialized countries also entered the list of those within the
highest labour costs (Taiwan, China; Republic of Korea).

Among those countries within the lowest labour costs, available data reveal that several
were below the level of US$0.5 per hour (Trinidad and Tobago, Madagascar followed by
Bangladesh, India, Kenya, Pakistan and Sri Lanka). A number of European industrialized
countries were also among those with labour costs of between US$0.50 and US$1 per hour
– for example, Bulgaria and the Russian Federation. A larger group of countries had hourly
labour costs of between US$1 and US$2 – although the clear majority were developing
countries from Latin America, Africa and Asia.

In spite of the relatively high labour costs in many industrialized countries, their products
continue to be competitive on world markets – a result of permanent efforts to rationalize
and modernize production processes, including the application of the newest technologies,
to develop new and higher quality products and to apply more efficient marketing
techniques.

AVERAGE HOURLY WAGES IN THE TCF INDUSTRY, 1995

As a general rule, wages in the textile industry tend to be higher than those in clothing and
footwear. This is due mainly to the higher skills of textile workers in the capital-intensive
process, where the responsibility – and the productivity – of the average worker managing
technologically advanced machinery is higher than in the other sectors.

As far as average hourly wages on a world level are concerned, wages in the textile
industry are generally the highest in European countries. In 1995, they accounted for two-
thirds of the European level in the Americas, for 40 per cent of the European average in
Asian countries, and for only about one-ninth of the European level in African countries.

During the 1980-95 period, the highest wage increases in textiles were recorded in Asian
countries, where the rise was clearly more marked than in Europe. It is interesting to note
that wages in European countries increased in spite of continuously shrinking employment,
while in Asia the number of employees increased rapidly. During the same period, the
lowest increase in hourly textile wages was reported for African countries and the countries
of Central and Eastern Europe, the latter on account of their transition to market
economies.

Comparing individual countries, the structure of labour costs is also reflected in hourly
wages. The European countries were, in 1995, at the top of wage levels ranging from some
US$8 to US$16 or more per hour, together with other industrialized countries such as
Japan, the United States, Canada and New Zealand. The lowest hourly wages in the textile
industry were paid mainly in Asian and Central and Eastern European Countries, with
wage levels at US$0.50 or less per hour. Among the countries with the lowest hourly wages
were Bangladesh, China, Egypt, India, Pakistan, some republics of the former USSR and
Turkey. It has to be noted that, by 1995, wages in Central and Eastern European Countries
such as Bulgaria and Romania had dropped from higher levels prevailing until 1990, due to
their conversion into market economies and their confrontation with world competition.
African and South and Latin American countries reported wages slightly higher than
US$0.50 for 1995. Devaluation of currencies vis-à-vis the US dollar played a part in the
changes over time in several countries.

Recent developments in textile wages show an upward trend in all countries for which data
are available. Between 1995 and 1997, based on national currencies, hourly wages
increased most in Central and Eastern European Countries such as the Czech Republic,
Estonia, Hungary and Latvia – all by more than 30 per cent. Other countries which
experienced such high wage increases included Israel, Mexico and Mauritius.

In 1995, the one factor that all countries in the world regions had in common was that
women were paid a lower average wage per hour than men; however, in most countries the
differences had tended to shrink over the years. The highest differences were recorded for
some countries in Asia and in Mexico, where female wages per hour still accounted for
only some 50 per cent of men’s wages in 1995. The difference was smaller in some other
Asian countries and in African countries, and was lowest in European countries where
women’s wages were at an average level of some 80 per cent of men’s wages.

In the clothing industries of the various world regions in 1995, the hourly wages differed
widely between European countries, with an average of US$6.50, and African countries,
with an average of only US$1.01. The Americas and the Asian countries were at 63 and 62
per cent of the European level, respectively.

Again, not surprisingly, industrialized countries within the regions had much higher wage
levels in 1995 than developing countries. In Europe, Western European countries were at
an average of US$9.85 against only US$0.64 in the Central and Eastern European
Countries. In Asia, the hourly wage in Japan, at US$9.38, compared with an average of
US$2.45 in the other countries for which data were available. The difference in the
Americas was lower, with US$7.23 in North America and US$3.86 in Latin America.

From 1980 to 1995, the highest wage increases were experienced by Asian countries (some
160 per cent), Latin American countries, (165 per cent), and European countries (some 150
per cent), despite continuous losses in clothing employment over that period in the latter.
However, the rise in wages was generally lower in clothing than in textiles, an exception
being the United States where wage increases were higher in clothing (94 per cent) than in
textiles (75 per cent). Only countries in Central and Eastern Europe registered a decline in
wage levels, on account of substantial changes to their economic systems during this
period.

Looking at individual countries, the highest wages were once again reported by Western
European countries, with US$10 or more per hour in 1995. Japan followed with US$9.40,
and only then the United States at US$7.64, and Canada (US$6.81). Hong Kong, China,
reported the highest wage among Asian countries (US$3.50), which was higher than wages
in European countries such as Latvia, Portugal and Slovenia.

In all the world regions,male wages remained higher than female wages, sometimes up to
about 50 per cent, particularly in a number of developing countries. In 1995, the smallest
differences were registered in Europe, with female wages reaching some 80 to 90 per cent
of men’s hourly wages.

If average hourly wage levels are compared with each other within the TCF industries and
with manufacturing as a whole, it appears that wages in textiles are lower than in
manufacturing and that wages in clothing tend to be lower than those in textiles and
footwear. This is a reality in most countries providing disaggregated statistical information
on wages in the TCF industries, whether they are industrialized or developing countries. If
part of the explanation of this wage differential relates to technological factors, as
explained before, it is clear that the growing international competition in the clothing
industry has maintained wages at a low level worldwide. Furthermore, the statistical
analysis gives only a limited image of the reality. Available statistics only cover registered
enterprises where working conditions in general – and wages in particular – are much
better than those in small enterprises in the informal sector. It is well known that –
especially in developing countries – an important part of the clothing assembly process is
performed in very small entities and by homeworkers. If wages paid to homeworkers and to
workers employed in the informal sector were integrated in official statistics, the wage gap
between rich and poor countries would appear wider and there would be a better
understanding of some outsourcing and relocation strategies based on the relative cost of
labour.

HOURS OF WORK: FROM STATISTICAL EVIDENCE OF REALITY

There are two kinds of working time which may be examined in the TCF context: the
statutory framework of regular working hours and the number of hours effectively worked
per week.

AVERAGE HOURLY WEEKLY HOURS IN THE TCF INDUSTRIES, 1985-95

In the textile industry, the amount of hours actually worked per week by a worker
(excluding overtime) tended to be higher in developing countries than in industrialized
countries. In 1995, African and Asian countries had the highest number of average working
hours per week in textile production, amounting to 50 and 44 hours, respectively. This was
above the average level of 43.5 hours per week for all countries for which information was
available. The reporting countries of the Americas, Australia and New Zealand had an
average level of about 40 hours, while European countries experienced the lowest average
weekly working time, at 38 hours.

During the 1985-95 period, the average number of working hours decreased in the
observed African, Asian and American countries and increased in Oceania, while it
remained almost unchanged in Europe. Data available for individual countries in 1995
showed the highest number of working hours per week in Egypt (58 hours per week)
followed by the Republic of Korea (51 hours). Other countries reporting high levels of
working hours were Singapore (49 hours), Costa Rica (48 hours), Peru and Argentina (46-
47 hours).

Most of the countries for which data were available reported an average number of 37-42
working hours per week in textile production. The countries with the lowest average
weekly working time were concentrated in Europe. Already during the 1980s, Denmark
had an average weekly working time of around 31 hours. In 1995, Estonia reported the
lowest number with 31.5 hours, followed by Slovakia (32.5 hours), Belgium and Austria
(some 33 hours each).

Over the 1985-95 period, substantial changes in the average weekly working time occurred
with major declines in a number of developing countries. More recently, the actual amount
of weekly hours of work has decreased mainly in industrialized countries, including some
Central and Eastern European and newly industrialized countries. Between 1995 and 1997,
the reduction was largest in Canada, Finland, Greece and New Zealand.
BANGLADESH

The global financial crisis has already started to have a negative impact on the increasingly
globalising economy of Bangladesh. The export growth rate has slowed in recent times,
particularly during the October 2008 to January 2009 period. Depreciation of currencies by
competing countries ranging from 6% to 30% over the past one year and their stimulus
packages that provide wide-ranging incentives to export-oriented sectors have led to
erosion of Bangladesh’s competitive strength in the global market in recent times.
Remittance earnings, although robust until now, could be adversely affected in the near
future: the number of job seekers leaving in January and February 2009 halved compared
with the same period of 2008. Some countries (such as Malaysia) have revoked earlier job
contracts and yet others have stopped issuing new visas (Saudi Arabia, United Arab
Emirates – UAE). The resultant adverse effects are likely to have negative implications for
gross domestic product (GDP) growth, labour markets and consequently the attainment of
poverty alleviation targets and the Millennium Development Goals (MDGs) by
Bangladesh.

CHINA

Beijing's heavy rural investment has led commentators to see hope for global recovery in
the Chinese countryside. Yet allocating funds to boost rural demand will fail to reverse
China’s long-standing subordination of the poor to export-oriented industrialization.

20th May 09 -Although China's GDP growth rate fell to 6.1% in the first quarter — the
lowest in almost a decade — optimists see "shoots of recovery" in a 30% surge in urban
fixed-asset investment and a jump in industrial output in March. These indicators are proof,
some say , that China's stimulus program of $586 billion — which, in relation to GDP, is
much larger proportionally than the Obama administration's $787 billion package--is
working.

Countryside as Launching Pad for Recovery?

With China's export-oriented urban coastal areas suffering from the collapse of global
demand, many inside and outside China are pinning their hopes for global recovery on the
Chinese countryside. A significant portion of Beijing's stimulus package is destined for
infrastructure and social spending in the rural areas. The government is allocating 20
billion yuan ($3 billion) in subsidies to help rural residents buy televisions, refrigerators,
and other electrical appliance.

There is another, greater problem with the strategy of making rural demand a substitute for
export markets. Even if Beijing throws in another hundred billion dollars, the stimulus
package is not likely to counteract in any significant way the depressive impact of a 25-
year policy of sacrificing the countryside for export-oriented urban-based industrial growth.
The implications for the global economy are considerable.

The ILO’s China country office was opened in Beijing in 1984, shortly after the start of the
country’s reform process. Since then there have been significant changes in what is now the
world’s fourth largest economy and China’s once centrally-controlled labour market is
giving way to a market-oriented system. These reforms have created a number of
challenges. These include rising unemployment (it’s estimated that more than 10 million
jobs need to be created each year), widening income inequalities, the needs of vulnerable
groups – particularly those who face difficulty finding work - and the need to develop high-
skilled workers. In addition, efforts need to be made to assist rural migrant workers seeking
jobs in urban areas.

The signing of a Memorandum of Understanding between the Ministry of Labour and

Social Security and the ILO in 2001 marked a new direction in the relationship. It defined a
framework for cooperation, based on China’s national priorities and the ILO’s Decent
Work Agenda. Subsequently a Decent Work Country Programme (DWCP), shaping the
ILO’s work in the country, was agreed. The DWCP has four priority areas:

• Promoting employment and employability, and reducing inequalities - with a

particular focus on the unemployed and internal migrants;
• Promoting better labour-management relations, effective labour market institutions
and labour laws;
• Extending and improving social protection;
• Promoting fundamental labour principles and workers’ rights.

AVERAGE MONTHLY WAGES

Average monthly wages have increased every year in China since the late 1980s. The
average wage in urban areas in 2006 was 1,750 yuan a month, four times higher than the
figure for 1995 (statistics: Average monthly wage in urban areas 1978-2007). However, as
wage levels increased, so did discrepancies between different sectors, types of ownership
and regions. In general, average monthly wages were higher in share-holding, foreign-
owned and state-owned enterprises, and were lowest in locally funded enterprises, with
wages in enterprises owned by Hong Kong and Taiwanese businesses in the middle
(statistics: Average monthly wages by types of ownership 2006-2007).

A more significant gap emerged between different occupations and industrial sectors, and
especially between low-skilled and highly-skilled workers (statistics: Monthly average
wages by sector 2006-2007). In 2006, the average wage of those employed in primary
industries was only 786 yuan, a quarter of the average wage of those working in financial
services (3,273 yuan); and one-fifth of those working in the computer industry (3,730
yuan).

The gap between urban and rural incomes also grew. A report from the Chinese Academy
of Social Sciences indicated that in 1978 urban income was 2.57 times that of rural income,
but by 2005, that gap had expanded to 3.22 times, and in 2006 to 3.27 times. In 2006, the
annual per capita disposable income of urban households was 11,759 yuan compared with
only 3,587 yuan in rural households. Taking into account the fact that rural residents
effectively have no social security or welfare benefits, the urban-rural income gap in real
terms was probably six-fold. The income discrepancy between rural and urban has been the
main cause in the surge of migrant labour over the last two decades. It is estimated that
there are about 120 migrant workers in China, nearly all of whom suffer from routine and
institutionalized discrimination in the urban areas they have migrated to.

THE MINIMUM WAGES

The provisions recommend that local and regional minimum wages should be set at about
40 to 60 percent of average monthly wages. In reality, the minimum wage in most
provinces is below or barely reaches the recommended level of 40 percent (statistics:
Proportion of minimum wages of monthly average wages 2006). In major cities, such as
Beijing and Shanghai, the minimum wage in 2006 was around 20 per cent of the average
monthly wage. The gap between the average monthly wage and minimum wage in Beijing
in 2006 was 2,703 yuan. Only in two provinces, Heilongjiang and Xinjiang, was the
minimum wage equivalent to the average standard of living (statistics: Minimum wages
minus average monthly living expense). In the more economically developed provinces,
such as Beijing and Guangdong, the shortfall between the minimum wage and average
monthly living expenses reached as high as 595 yuan, a figure in excess of the national
minimum wage of 575 yuan.

The life of workers got worse in 2007 when inflation accelerated even further. In October
2007, the consumer price index rose to an 11-year high of 6.9 percent, with the basic food
prices increasing by 18.2 percent year on year. In July 2007, the price of a catty (about a
pound) of pork in Guangdong had increased to 13.6 yuan, while the minimum wage in the
province remained between 450 and 780 yuan.Although the government urged employers
to pay higher than the minimum wage, many low-skilled workers only received the
minimum wage for a 40-hour working week. In order to earn sufficient money, many
migrant workers in Dongguan had to extend their working hours to 12 to 14 hours a day,
seven days a week, and with only one day off a month. These workers worked between 84
to 98 hours a week on a regular basis, so that overtime accounted for between 30 to 50
percent of their final monthly pay packets.

EUROPE AND CENTRAL ASIA

All European and Central Asian countries are increasingly confronted with the challenges
arising out of globalization. Their responses must focus on improving economic efficiency
and social inclusion. For countries in Central and Eastern Europe and Central Asia, the
establishment or consolidation of a functional market economy with a strong social
component remains a key priority.
Priorities in Europe in the 2010-11 biennium are being shaped by the 2008 ILO Declaration
and the conclusions of the 8th European Regional Meeting in Lisbon (February 2009).
However, the unfolding financial and economic crisis is expected to have significant
negative impacts on the labour market and social situation in Europe and hit particularly
Central and Eastern European and Central Asian countries with high current account
deficits and those with low incomes. The ILO will help these countries to mitigate the
employment, labour and social impacts of the crisis through policy advice and technical
assistance, taking into account its gender dimensions.

Employment creation has up until now also remained unsatisfactory and many new jobs are
poorly paid, of low OSH standards and uncovered by social security schemes, in particular
in the informal economy. Low wages, unemployment and under-employment, informal
employment, insufficient social security coverage with low level of benefits, and poverty
are widespread phenomena. The economic crisis will deprive many workers of their jobs,
impede the creation of new jobs and will aggravate the social situation of redundant
workers and their families as well as the poor in general.

A practical, flexible approach is necessary to respond to changing political climates and

emerging needs. Work in the coming years will be guided by conclusions of the Eighth
European Regional Meeting and Decent Work Country Programmes with the aim of
supporting economic and social developments in priority countries.

ASIA AND THE PACIFIC

The ILO’s Regional Office for Asia and the Pacific covers one of the most diverse regions
of the world – ethnically, culturally, religiously and economically. The population of more
than 3.7 billion people includes some of the wealthiest countries on earth as well as two-
thirds of the world’s poor.

In recent years the region has faced challenges that have seriously tested its social-
economic infrastructure – natural disasters, economic crises and continuing conflicts. In
addition, shifts in the international economic environment and the spread of globalization
continually generate new challenges.

The ILO works with its members in the region to deal with these and other issues.
Institution building and local economic development play a critical role in social and
economic progress. Respect for fundamental principles and rights at work helps to ensure
that all sections of society benefit.Significant challenges remain, including increasing
productive employment opportunities, providing adequate social protection, combating
human trafficking, and tackling bonded labour and child labour.
The major donors for the ILO’s work in the region include the European Union, Germany,
Japan, Republic of Korea, the Netherlands, Norway, Sweden, United Kingdom, United
States of America and the UN Development Programme.

More than 30 countries in Asia and the Pacific are members of the ILO. The ILO covers
one of the most diverse regions of the world – ethnically, culturally, religiously and
economically. The population of more than 3.7 billion people includes some of the
wealthiest countries on earth as well as two-thirds of the world’s poor.

INDIA
India is one of the founder members of the ILO and a permanent member of the ILO's
Governing Body since 1922. A Branch Office of the ILO was established at Delhi in 1928
which became Area Office in 1970. The Asian Regional Team for Employment Promotion
(ARTEP), the Asian arm of the World Employment Programme of the ILO was hosted by
the Government of India from 1986 till 1993 when ARTEP was integrated into South Asia
Multi-disciplinary Advisory Team (SAAT) consequent upon the restructure of the ILO's
field offices in 1994. This Multi-disciplinary Team with specialization in different fields of
ILO's Mandate were providing Technical Advisory Services to the South Asian Countries.

In 2003, the Area Office for India and Bhutan and Multi-Disciplinary Team (MDT) were
integrated to become the Subregional Office for South Asia (SRO-New Delhi). The SRO-
New Delhi works closely with the respective Liaison/Country Offices in Afghanistan,
Bangladesh, Nepal, Pakistan and Sri Lanka in implementing ILO activities. In addition,
SRO-New Delhi is responsible for ILO activities in the Islamic Republic of Iran and the
two non-member countries viz. Bhutan and Maldives.
The average daily wage rates worked out to Rs.200.16 in Jute Textiles, Rs.144.70 in
Synthetic Textiles, Rs.136.24 in Woollen Textiles, Rs.130.56 in Silk Textiles and Rs.119.24
in Cotton Textiles.
At the stratum level taking all Textiles together the highest average daily wage rate was
reported in West Bengal Rs.210.31 for the Jute Textiles whereas, the lowest average daily
wage rate was reported in Tamil Nadu stratum Rs.64.52 for the Silk Textiles.
The overall average daily wage rates of men, women and all workers for all the five
textiles industries combined together were Rs.150.72, Rs.73.86 and Rs.141.79
respectively. The Table reveals that average daily wage rates of women workers were less
than that of the men workers in all the five textiles industries. Further, at the stratum level
also, the average daily wage rates of women workers were lower than their male
counterparts in all the strata of all five textiles industries except Punjab stratum of Woollen
textiles industry.
The average daily wage rates of time-rated and piece-rated workers worked out to be
Rs.128.62 and Rs.193.81 respectively, for all the textiles taken together. Amongst five
textiles industries, the average daily wage rates of time-rated workers was the highest at
Rs.167.45 for Jute Textiles and the lowest at Rs.119.66 for Cotton Textiles. In case of
piece-rated workers, the highest and the lowest average daily wage rates were reported
Rs.209.46 for Jute Textiles and Rs.101.11 for Woollen Textiles respectively. The average
daily wage rates of time-rated workers were more than that of the piece-rated workers in
Cotton, Woollen and Silk Textiles, whereas it was reverse for Synthetic and Jute Textiles.
At the industry level, the average daily wage rates of time-rated men and women workers
were the highest at Rs.168.49 in Jute Textiles and Rs.110.58 in Woollen Textiles
respectively, whereas the lowest average daily wage rates for time-rated men and women
workers were Rs.130.31 and Rs.69.26 respectively in Cotton Textiles.For all the textiles
industries taken together, the average daily wage rates for time-rated men, women and all
workers were Rs.136.94, Rs.70.07 and Rs.128.62 respectively.

For all the textiles industries combined, the average daily wage rates for piece-rated men,
women and all workers were reported Rs.202.77, Rs.96.03 and Rs.193.81 respectively.
The highest average daily wage rates of piece-rated men and women workers at the
industry level was reported Rs.210.12 and Rs.136.55 respectively in Jute Textiles,
whereas, the hlowest average daily wage rates of piece-rated men and women workers was
reported Rs.105.33 in Woollen Textiles and Rs.46.15 in Silk Textiles respectively.
In Cotton Textiles, the highest and the lowest average daily wage rates were reported at
Rs.293.50 for 'Mechanical/Electrical Foreman' and Rs.72.33 for 'Blacksmith'
respectively. In Woollen Textiles, the highest and the lowest average daily wage rates
were reported at Rs.273.19 for 'Supervisor' and Rs.87.13 for 'Sorter' occupations
respectively. The highest and lowest average daily wage rates in Silk Textiles were
reported Rs.235.89 for 'Head Jobber' and Rs.73.76 for 'Cooker' occupations respectively.
In Synthetic Textiles, the highest and the lowest average daily wage rates were reported
Rs.307.69 for 'Front Sizer/Sizer' and Rs.68.75 for 'Tape Man' occupations respectively. In
Jute Textiles, the highest and lowest average daily wage rates were reported Rs.229.43 for
'Breaker Receiver' and Rs.115.38 for 'Mechanic (General)' occupations respectively.

PAKISTAN
Pakistan has been as important and active Member State of the ILO since its inception in
1947. Pakistan's Government, Employers' and Workers' representative have been elected
Members of the ILO Governing Body repeatedly over the years. The ILO Office was
established in Pakistan in 1970 which was first located in Karachi and later shifted to
Islamabad when it became capital of the country. Before that, the ILO had a
Correspondence Office in Karachi with an ILO National Correspondent.
WAGE PAY SYSTEM

LEGAL MINIMUM WAGE 4600.00

STANDARD WORK SCHEDULE

DAYS PER WEEK 6
HOURS PER DAY 8
HOURS PER WEEK 48
HOURS PER MONTH 208

STD PAY PER HOUR 22.12

OVERTIME PREMIUM 200.00 0.00
Regular Pay + 200 % For OverTime on Weekdays
Regular Pay + 200 % For OverTime on Sundays / Holidays
OT RATE/ HOUR
44.23 0.00

FACTORY
Project No.
Report No.
COUNTRY Pakistan
CURRENCY PKR
EXCHANGE RATE 60 PER US$
 LEGAL AGE 18
PERIOD REVIEWED October 2007 through January 2008
EMPLOYEE HEADCOUNT
No. of Employees on Payroll
SAMPLE TOTAL 20

AVERAGE WAGES PAID 5344.75

AVERAGE HOURS WORKED 222.20

LEGAL REQUIRED PAY

MINIMU
Total OT Regular OT OT TOTAL MINIMUM MINIMUM M ACTUAL
HOURS Hours Weekdays Sun./Hol. HOURS REG PAY OT PAY TOTAL TOTAL

20.5 208.0 12.0 0.0 220.00 4600.00 906.73 5506.73 5602.00

13.0 208.0 13.0 0.0 221.00 4600.00 575.00 5175.00 5241.00
10.0 208.0 10.0 0.0 218.00 4600.00 442.31 5042.31 5100.00
8.0 200.0 8.0 0.0 208.00 4600.00 353.85 4953.85 5017.00
9.0 216.0 9.0 0.0 225.00 4600.00 398.08 4998.08 5019.00
23.0 208.0 23.0 0.0 231.00 4600.00 1017.31 5617.31 5678.00
22.0 208.0 22.0 0.0 230.00 4600.00 973.08 5573.08 5600.00
23.0 208.0 23.0 0.0 231.00 4600.00 1017.31 5617.31 5716.00
17.5 208.0 13.0 0.0 221.00 4600.00 774.04 5374.04 5390.00
12.0 208.0 12.0 0.0 220.00 4600.00 530.77 5130.77 5231.00
10.0 208.0 10.0 0.0 218.00 4600.00 442.31 5042.31 5098.00
11.0 208.0 11.0 0.0 219.00 4600.00 486.54 5086.54 5167.00
12.0 208.0 12.0 0.0 220.00 4600.00 530.77 5130.77 5345.00
10.0 208.0 10.0 0.0 218.00 4600.00 442.31 5042.31 5143.00
12.0 208.0 12.0 0.0 220.00 4600.00 530.77 5130.77 5302.00
8.0 208.0 8.0 0.0 216.00 4600.00 353.85 4953.85 5020.00
9.0 208.0 9.0 0.0 217.00 4600.00 398.08 4998.08 5067.00
16.0 208.0 16.0 0.0 224.00 4600.00 707.69 5307.69 5400.00
32.0 208.0 32.0 0.0 240.00 4600.00 1415.38 6015.38 6192.00
19.0 208.0 19.0 0.0 227.00 4600.00 840.38 5440.38 5567.00
INDONESIA

Indonesia has a market-based economy in which the government plays a significant role.
The President, who took office in October 2004 after the country’s first direct presidential
election, has implemented a "pro-growth, pro-poor, pro-employment" economic
programme to reduce unemployment and poverty significantly. This is set out in the
Indonesian Government’s National Medium Term Development Plan 2004 – 2009 (RPJM),
which focuses on four broad objectives: creating a safe and peaceful Indonesia, a just and
democratic Indonesia, a prosperous Indonesia, and establishing a stable macroeconomic
framework for development.

Despite an annual average GDP growth of 5% between 2002 and 2006, Indonesia’s open
unemployment rate has risen from 9.1% to 10.4% during the same period and half the
population of 220 million continue to live under the US$2 per day poverty line. In February
2006, the Government announced new policy measures to improve the investment climate
in Indonesia for both domestic and foreign investors, so as to generate employment. The
package consists of policies designed to strengthen investment services, harmonize central
and regional regulations, improve customs, excise, and taxation services, create jobs, and
support small and medium enterprises.

In addition to unemployment, underemployment also remains prevalent, at 30%, and more

than two-thirds of the employed are in the informal economy. Many Indonesians seek
better opportunities abroad – there are about four million documented migrant workers
from Indonesia and it is estimated that the number of undocumented migrants is 2 to 4
times higher. The skills base and productivity of the labour force is insufficient and there is
continued exploitation at work. Socio-economic exclusion of the marginalized and
vulnerable in society is a continuing concern, with young women and men and those living
in conflict and crisis affected areas most at risk. Youth, as one example, are three times
more likely to be unemployed than adults.

Industri / Manufacturing
Indeks
Tahun / Upah Indeks Upah
Bulan / Month IHK / CPI Nominal / Upah Riil /Nominal / Upah Riil
Year / Real
Nominal Real Wage Nominal
Wage
Wage (000) Wage Index
Index
(1) (2) (3) (4) (5) (6) (7)
1996 100.0 184.8 184.8 100.0 100.0
March 102.2 201.0 196.7 108.8 106.4
June 1997 102.8 215.1 209.4 116.4 113.3
September 105.7 221.1 209.2 119.7 113.2
December 111.8 224.6 200.9 121.5 108.7
March 142.2 227.1 159.8 122.9 86.5
June 163.9 242.6 148.0 131.2 80.1
1998
September 196.2 269.1 137.2 145.6 74.2
December 198.6 275.1 138.5 148.9 74.9
March 206.8 290.6 140.5 157.2 76.0
June 204.1 323.1 158.3 174.8 85.7
1999
September 198.7 313.3 157.7 169.5 85.3
December 198.5 322.7 162.6 174.6 88.0
March 204.3 333.0 163.0 180.2 88.2
June 208.2 384.0 184.4 207.8 99.8
2000
September 211.9 412.3 194.6 223.1 105.3
December 221.4 427.3 193.0 231.2 104.4
March 226.0 473.1 209.4 256.0 113.3
June 233.5 535.3 229.3 289.6 124.1
2001
September 239.4 556.3 232.3 301.0 125.7
December 249.2 548.1 220.0 296.6 119.0
March 257.9 633.9 245.8 343.0 133.0
June 260.3 666.4 256.1 360.6 138.6
2002
September 264.5 653.6 247.1 353.6 133.7
December 274.1 671.2 244.8 363.2 132.5
March 276.2 691.5 250.3 374.1 135.4
June 277.5 722.3 260.3 390.8 140.8
2003
September 280.9 725.2 258.1 392.4 139.7
December 288.0 749.0 260.1 405.3 140.7
March 290.6 819.1 281.9 443.2 152.5
June 297.4 853.2 286.8 461.6 155.2
2004
September 299.0 840.7 281.2 454.9 152.2
December 306.5 855.5 279.2 462.9 151.0
March 316.2 876.6 277.2 474.3 150.0
June 319.6 911.6 285.3 493.2 154.3
2005
September 326.1 937.6 287.5 507.3 155.6
December 358.9 930.7 259.3 503.6 140.3
March 366.0 982.4 268.4 531.5 145.2
June 369.2 990.9 268.4 536.2 145.2
2006
September 373.5 954.2 255.5 516.3 138.2
December 382.6 957.4 250.3 518.0 135.4
March 389.9 1043.6 267.7 564.7 144.8
June 2007 390.5 1045.9 267.8 565.9 144.9
September*) 399.5 1015.7 254.3 549.6 137.6
December*) 407.8 1050.42 257.6 568.3 139.4
March*) 421.7 1141.6 270.7 617.7 146.5
June*) 2008 440.6 1148.60 260.7 621.5 141.0
September*) 453.3 1152.6 254.3 623.6 137.6
December**)
VIET NAM

Viet Nam has a population of approximately 86 million people. Since the beginning of the
“doi moi” reforms in 1986 Viet Nam has made remarkable progress in terms of economic
and social development. Productivity has increased tremendously and the structural
changes towards a market-based economy are considerable and have been supported by
Viet Nam’s membership of the World Trade Organization (WTO) which it joined in 2007.

The ILO Office in Viet Nam opened in 2003. A national cooperation Framework on
Promoting Decent Work (2006-2010) was signed by ILO and its constituents on 12 July
2006. Currently, the ILO’s work in the country covers a wide range of areas including
social insurance, employment and enterprise development, occupational safety and health,
industrial relations and the ratification of ILO Conventions, and the formulations of labour
laws. A Decent Work Country Programme (DWCP) is expected to be finalized soon.

Since 2006 Viet Nam has been a One UN pilot country. The ILO has integrated all its
activities into the One UN Plan clustered around three strategic priority areas. These
include employment and sustainable enterprise development, social protection, and labour
market governance. In addition, the core ILO concerns of social dialogue, international
labour standards and gender are integrated into each of these priority areas of work.

JAPAN

As a founding member, Japan has a relationship with the ILO dating back to 1919. The
ILO opened a branch office in Tokyo in November 1923 and although the office closed
from 1940-51, when Japan withdrew from the ILO, it was re-established soon after
country's readmission to the organization. The Japanese government holds one of ten
permanent seats on the ILO Governing Body, and currently the Japanese employers and
workers groups are also represented.

As well as being the second largest contributor to the ILO s budget the Japanese
government is also a major donor to technical cooperation projects; in 2008 the total
contribution was close to US$60 million. Japanese employers and workers organizations,
research institutes, cooperative and businesses, also support ILO work.

Japan has ratified 48 ILO Conventions (including six of the eight core conventions); the
most recent was the Promotional Framework for Occupational Safety and Health
Convention, 2006 (No. 187), ratified on 24 July 2007.

Decent work is actively promoted by tripartite constituents and the ILO Association of
Japan, with a focus on achieving the goals of the Asian Decent Work Decade (2006-2015).
Decent Work National Plan of Action is prepared by each fiscal year since 2007, and,
following consultations, a Decent Work Country Programme (2007-09) has been developed
to guide ILO activities. This DWCP includes five priorities:

• Promoting the ratification of ILO Conventions;

• Supporting the realization of decent work, in the light of changing work patterns;
• Promoting social dialogue;
• Mobilizing resources;
• Strengthening information-related activities, including additional networking
between experts and more reporting on labour and social trends.

KOREA

The Republic of Korea has been a member of the ILO since 1991. The country has ratified
a total of 24 ILO Conventions, including four of the eight ILO fundamental conventions
(covering discrimination and child labour). The Korean government has a mid-term plan to
ratify more ILO conventions, including at least two more Fundamental Conventions.

Since joining the ILO South Korea has become the eleventh largest contributor to the ILO
regular budget. South Korea is committed to the development of decent work in the region
and the ILO is working with the constituents to facilitate their work in other countries in
the region (particularly ASEAN member countries), through the ILO/Korea Partnership
Programme.

The 2007-2008 ILO/Korea Partnership Programme focuses on four areas: Competitiveness,

Productivity and Jobs; Governance and Social Protection; Labour Migration; and Research
on Decent Work and Occupational Safety and Health. The first three areas are under the
responsibilities of the ILO Regional Office for Asia and the Pacific while the last area is
managed by ILO Headquarters in Geneva.

The current ILO/Korea Partnership Programme works with countries to improve their
knowledge and the coherence of their policies relating to productivity, growth, employment
creation and job quality. Projects also cover skills development policies and programmes
that have a particular focus on disabled persons, women, migrant workers and other
excluded groups.

Improving workplace relations and practices, health, income protection for workers and
their dependants are other focuses of attention. The management of labour migration is
another Programme concern, particularly providing systems that help those involved with
labour migration find the information they need, the creation of common regional skills
standards for workers, and the provision of productive, gainful employment for
migrants.ILO work in Korea is supported through the ILO Subregional Office for East
Asia, based in Bangkok, Thailand.
UNITED KINGDOM

The UK minimum wage will rise by 7p to £5.80 an hour from October, the
government has announced.
The rate for 18 to 21-year-olds will increase by 6p to £4.83 and for 16 and 17-year-olds
will go up by 4p to £3.57. The change will come a year after the statutory hourly rate was
increased by 21p an hour. Business leaders had recently called for the minimum wage to be
left at the current levels in 2009 amid the economic downturn. The government said that
nearly one million people would benefit from October's increase. It also announced that,
from October 2010, the adult statutory minimum rate would apply to 21-year-olds. At
present their minimum wage is set - together with workers aged 18, 19 and 20 - at a lower
rate.