Wage Pressures Vary Widely Across the Globe, an analysis by Frank Steemers, Senior Economist for The Conference Board

New research from The Conference Board reveals that strong wage pressures recently seen in the United States are not being observed in many other economies.

According to the Wage Pressure Index, a new metric developed by researchers at The Conference Board, wage pressures vary widely around the world. These pressures are especially weak in Southern Europe, France, and Japan, mostly due to weak economic growth in 2020 and slow estimated productivity growth in 2021. A wider gap between the unemployment rate and the natural rate of unemployment (i.e., more unemployed workers compared to periods of labor market tightness) will also keep wage growth muted in these nations.

However, wage pressures may intensify over the next few years as labor shortages reappear due to the rapidly aging workforce and declining unemployment rates in many mature economies. This is especially true in Central and Eastern Europe. In the US, strong wage growth is already evident, especially in blue-collar and manual services jobs.

For more information on the Wage Pressure Index and other insights on the global labor market please see the new report Global Labor Market Outlook 2021.

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