India’s salary growth at 0.2%, GDP gain of 63.8% since 2008
New Delhi: India has seen a salary growth of just 0.2% since the great recession eight years back, while China recorded the largest real salary growth of 10.6% during the period under review, says a report.
According to a new analysis by the Hay Group division of Korn Ferry, India’s salary growth stood at 0.2% in real terms, with a GDP gain of 63.8% over the same period. During the period under review, China, Indonesia and Mexico had the largest real salary growth at 10.6%, 9.3% and 8.9%, respectively.
Meanwhile, some other emerging markets including Turkey, Argentina, Russia and Brazil had the worst real salary growth at (-) 34.4%, (-) 18.6%, (-) 17.1% and (-) 15.3%, respectively. “Most emerging G20 markets stood at either one end of the scale or the other either amongst the highest for wage growth, or amongst the lowest.
However, India stood right in the middle, with all the mature markets,” the report said. The report further noted that Indian wage growth is the most unequal. “Of the countries we looked at, Indian wage growth was by far the most unequal – people at the bottom are 30% worse off in real terms since the start of the recession; whilst people at the top are 30% better off,” Benjamin Frost, Korn Ferry Hay Group Global Product Manager – Pay said.
Strong wage growth for senior jobs is mostly because of skill shortages for key professional and managerial roles; and the increasing connection to a more globalised pay market at the senior levels – a market where India still pays less than most countries, but is catching up fast, Frost said.
Regarding the poorer wage growth at the bottom, the report noted that it is more because of an oversupply of people. “India has made less progress than some other countries in bringing high value jobs to the country. This has led to poor job growth, therefore an oversupply of un/semi-skilled people, and poor wage growth,” Frost said.
Globally, the US suffered one of the worst salary recoveries among developed nations. Adjusted for inflation, salaries in the US decreased 3.1% on average since September 2008 – despite a Gross Domestic Product (GDP) growth of 10.2%.
Canada’s salary recovery is the best among developed nations, with a 7.2% salary growth on average, with a GDP gain of 11.2%. Other developed nations experienced flat to modest salary growth, with Australia at 5.9%, France at 5.2%, Germany at 5% and Italy at 2.4%.
“While overall, global economists point to this recovery as one of the worst in history, there are political, economic and social reasons for the disparate salary fluctuations in different countries,” Frost said.