Labour income stagnated since 2019, primarily due to Covid and technological upgradation: ILO

The International Labour Organisation Wednesday said that the labour income share has stagnated since 2019, due to Covid and technological upgradation, putting upward pressure on inequality and a large share of youth remains out of employment, education or training.

The global labour income share represents the portion of total income earned by workers.

In its World Employment and Social Outlook: September 2024 Update, ILO said the global labour income share fell by 0.6 percentage points from 2019 to 2022 and has since remained flat, compounding a long-running downward trend.


If the share had remained at the same level as in 2004, labour income would be larger by $2.4 trillion in 2024 alone, ILO said.

“The COVID-19 pandemic is a key driver of this decline, with nearly 40% of the reduction in the labour income share occurring during the pandemic years of 2020-2022,” it said.

“The crisis exacerbated existing inequalities, particularly as capital income continues to concentrate among the wealthiest, undermining progress towards the Sustainable Development Goal 10, which aims to reduce inequality within and among countries,” ILO added.

ILO further said that technological advances, including automation, have played a role in this trend. “While these innovations have boosted productivity and output the evidence suggests that workers are not sharing equitably from the resulting gains,” it added.

The report warns that without comprehensive policies to ensure that the benefits of technological progress are broadly shared, recent developments in the field of artificial intelligence could deepen inequality, putting the achievement of the SDGs at risk.

“Countries must take action to counter the risk of declining labour income share,” Celeste Drake, deputy director-general, ILO said.

“We need policies that promote an equitable distribution of economic benefits, including freedom of association, collective bargaining and effective labour administration, to achieve inclusive growth, and build a path to sustainable development for all,” Drake added.