This refers to ‘Who got the benefits of growth?’, January 22, by Raghav Gaiha and Katsushi Imai. The ILO’s recently published Global Wage Report 2008/09 often sets the standards by which wage agreements and relative share of wages are evaluated all over the world. Hence, it is only appropriate that the basic messages from this publication be right and stand up to scientific scrutiny. Gaiha and Imai convincingly argue that although labour may not have done well during the high-growth phase of the past few years, it is difficult to argue that globalisation’s effects on labour and wages have been deleterious. Large household-level data sets, like those used by Gaiha and Imai, are likely to yield more stable estimates than aggregate data. While the report argues in favour of greater collective bargaining to improve wage outcomes, trade unions in several parts of the world are currently restraining wage demands in order to protect jobs during the current global recession.
Raghbendra Jha, via email
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