From the United States to China Passing through Germany, the average wage increase is expected to exceed 4 percent in 2023 in seven major economic countries in the world, according to a study published by Willis Towers Watson, a financial advisory firm.
The revaluation rate that companies intend to make for next year ranges from 4 percent in France to 6.6 percent in Brazil, according to the British-American insurance and advisory firm.
rise rates
The rate of increase is expected to be 4.6 percent United State and 5.67 percent in China, according to the company, which conducted a survey in 135 countries, but referred only to responses collected in seven major economies in the world.
In six of the seven countries involved (Germany, Canada, China, France andUnited kingdom and the United States), the rate of increase planned for 2023 is greater than that recorded in 2022. Only Brazil is an exception, with increases expected to average 7 percent in 2022 and 6.6 percent next year.
The study was conducted online from October 3 to November 4, 2022, and included 25,000 companies in 135 countries. Among the reasons that push companies to grant more generous raises is primarily inflation and tensions in the labor market, according to the study.
Staffing challenges
Companies operating in each of the seven countries admit that they are facing increased difficulty in recruiting and retaining their employees in 2022 compared to the previous year.
Estimates for 2023 vary, as Canadian and US companies expect employment tensions to ease, while Chinese companies believe it will continue. Germany, France, Brazil and the United Kingdom fear that it will be more difficult to recruit and retain employees in 2023.
Companies, especially in the information technology and digital professions sector, are facing more difficulty in hiring as the demand for engineers increases.
“The economic outlook in general is pessimistic for 2023, with a recession expected in many economies,” said Khalil Ait Mouloud, who heads the wage study at Willis Towers Watson.
Unemployment rate
On the other hand, the International Labor Organization does not expect a significant recovery in global employment rates and reaching pre-COVID-19 levels during 2022 and 2023. The global unemployment rate reached 6.2 percent of the world’s total workforce in 2021, down from the highest level in decades of 6.6 percent, which the world reached in 2020.
At the country level, US data showed stronger-than-expected growth in jobs and wages in November.
In Germany, during his first year in the chancellorship, Olaf Scholz succeeded in implementing some points of his program, such as increasing the minimum hourly wage to 12 euros ($12.59) from 9.6 euros ($10.08) before, and reforming the unemployment compensation system, both of which the Social Democrats adhere to.
real wages
On the contrary, real wages declined in Japan last October by 2.6 percent compared to last year, for a decline for the seventh month in a row, which threatens to harm consumption in light of the rise in commodity prices and the weakness of the local currency, the “yen”.
Despite the expectation of an increase in wages globally, the challenge remains the fairness of distribution between sectors. For example, the United States, South Korea and the United Kingdom suffered strikes in the transport and vital shipping sectors this December to demand higher wages and a guarantee of a minimum wage.