Visualizing How COVID-19 Has Impacted Global Wages
Connect with us

Markets

Visualizing How COVID-19 Has Impacted Global Wages

Published

on

Visualizing How COVID-19 Impacted Global Wages

In the years leading up to the pandemic, annual global wage growth was fluctuating stably between 1.6%–2.2%. Now, income, working hours, and employment have all been impacted by COVID-19—but for those who have held onto their jobs, how have wages been affected?

This interactive chart from the International Labour Organization (ILO) reveals how the global pandemic has affected both nominal and real wages, as well as unemployment rates.

The date of data collection varies on a country-by-country basis, using the most recent available data. The most recent measurement of wage indices is from September 2020 in some countries and the least recent available data comes from Q2’2020. In select countries the date of unemployment rates and wage indices are different. As a point of reference, the average wage index in 2019 was 100.

Note: the ILO uses national statistics databases and only the select countries had enough recent, available data for all three elements: nominal wages, real wages, and unemployment.

Where Average Wages are Falling

Average wages in many countries either plateaued or decreased significantly during the global pandemic. Sharp declines happened across a number of European countries, as well as in South Africa and Japan, for example.

CountryUnemployment RateReal Wage IndexNominal Wage Index
🇻🇳 Vietnam (as of Q2'2020)2.7%92.494.4
🇪🇸 Spain (as of Q2'2020)15.3%92.592.3
🇲🇽 Mexico (as of August 2020)5%94.498
🇿🇦 South Africa (as of Q2'2020)23.3%95.297.4
🇰🇷 South Korea (as of August 2020)3.1%96.296.8
🇷🇺 Russia (as of August 2020)6.4%96.9100.5
🇨🇿 Czech Republic (as of Q2'2020)6.6%97.899.6
🇸🇰 Slovakia (as of Q2'2020)6.6%97.899.6
🇯🇵 Japan (as of August 2020)3%98.698.7
🇫🇮 Finland (as of August 2020)7.9%99.6100.1
🇩🇪 Germany (as of Q2'2020)4.4%99.6100.5
ℹ️ Nominal wages are the actual wages/money that a worker receives. Real wages represent the relative purchasing power of nominal wages.

Falling wages, however, do not necessarily mean that people are receiving less money, as many subsidies have been put in place to help cushion income or job loss.

In many cases where wage indices declined, employment did not. This is because different job retention schemes were put in place, wherein workers were furloughed, but were given a portion of their wages from the national government. This allowed unemployment rates to remain steady while wages tapered off.

In Europe, where wages have dropped considerably in many countries, wage subsidies have compensated for nearly 40% of wage bill loss in select countries. But while high income countries can afford to inject stimulus into their economies, most lower income countries cannot. This has come to be described as the fiscal stimulus gap.

Where Average Wages are Rising

While perhaps counterintuitive, rising average wages are in no way an inherent sign of a recovering economy or labor market. Regardless, when compared to 2019, wages have actually increased in the majority of countries, such as Brazil, Canada, United States, Italy, and the UK.

CountryUnemployment RateReal Wage IndexNominal Wage Index
🇨🇦 Canada (as of August 2020)10.6%107.6108.4
🇲🇰 North Macedonia (Unemployment: Jun '20; wage data: Aug '20) 16.7%107.6109.7
🇧🇷 Brazil (as of Q2'2020)13.3%107.3109.6
🇧🇬 Bulgaria (as of June 2020)5.9%106.9107.8
🇭🇺 Hungary (as of August 2020)4.4%106.3106.5
🇮🇹 Italy (as of Q2'2020)8.3%106.2106.2
🇫🇷 France (as of Q2'2020)7.1%105.4105.9
🇷🇸 Serbia (Unemployment: Jun '20; wage data: Aug '20)7.7%104.7106.7
🇳🇴 Norway (as of Q2'2020)4.6%104.5105.6
🇺🇸 U.S. (as of September 2020)7.9%104.3106.2
🇵🇹 Portugal (as of June 2020)7.3%103.2104.2
🇹🇭 Thailand (as of Q2'2020)2%103100.6
🇷🇴 Romania (as of August 2020)5.3%102.5105.2
🇳🇱 Netherlands (as of September 2020)4.4%102103.6
🇬🇧 UK (as of September 2020)4.8%101.5102.4
🇩🇰 Denmark (as of Q2'2020)5.3%101.4101.5
🇸🇪 Sweden (as of August 2020)8.8%100.8101.6
🇨🇱 Chile (as of August 2020)12.3%100.6103.4
🇲🇾 Malaysia (as of June 2020)4.7%100.299
ℹ️ Nominal wages are the actual wages/money that a worker receives. Real wages represent the relative purchasing power of nominal wages.

One reason for higher average wages is something called the compositional effect. The compositional effect is what occurs when wages are not actually increasing, but the makeup of employment changes. For example, the loss and subsequent absence of many lower paying jobs from the labor market due to COVID-19 can skew the average wage upwards.

Brazil is a prime example of the compositional effect. As both nominal and real wages increase, so does unemployment. Brazil’s current unemployment rate is 13.3%, while wages have skyrocketed to a real wage index of 107.3 during the first half of 2020.

The loss of these lower paying jobs has been extremely widespread, most negatively impacting informal workers, self-employed vendors, and migrant workers. Some policymakers have seen this as an opportunity to call for universal basic income. Even with job retention schemes to keep unemployment steady, many people are earning far less income and may never return to normal working hours in their current positions.

Click for Comments

Markets

Mapped: Distribution of Global GDP by Region

Where does the world’s economic activity take place? This cartogram shows the $94 trillion global economy divided into 1,000 hexagons.

Published

on

Map of Global Wealth Distribution

Mapped: The Distribution of Global GDP by Region

Gross domestic product (GDP) measures the value of goods and services that an economy produces in a given year, but in a global context, it is typically shown using country-level data.

As a result, we don’t often get to see the nuances of the global economy, such as how much specific regions and metro areas contribute to global GDP.

In these cartograms, global GDP has been normalized to a base number of 1,000 in order to show a more regional breakdown of economic activity. Created by Reddit user /BerryBlue_Blueberry, the two maps show the distribution in different ways: by nominal GDP and by GDP adjusted for purchasing power parity (PPP).

Methodology

Before diving in, let us give you some context on how these maps were designed. Each hexagon on the two maps represents 0.1% of the world’s overall GDP.

The number below each region, country or metropolitan area represents the number of hexagons covered by that entity. So in the nominal GDP map, the state of New York represents 20 hexagons (i.e. 2.0% of global GDP), while Munich’s metro area is 3 hexagons (0.3%).

Countries are further broken down based on size. Countries that make up more than 0.95% of global GDP are broken down into subdivisions, while countries that are smaller than 0.1% of GDP are grouped together. Metro areas that account for over 0.25% of global GDP are featured.

Finally, it should be noted that to account for some outdated subdivision participation data, the map creator calculated 2021 estimates for this using the formula: national GDP (2021) x % of subdivision participation (2017-2020).

Nominal vs. PPP

The above map is using nominal data, while the below map accounts for differences in purchasing power (PPP).

Adjusting for PPP takes into account the relative value of currencies and purchasing power in countries around the world. For example, $100 (or its exchange equivalent in Indian rupees) is generally going to be able to buy more in India than it is in the United States.

This is because goods and services are cheaper in India, meaning you can actually purchase more there for the same amount of money.

Anomalies in Global GDP Distribution

Breaking down global GDP distribution into cartograms highlights some interesting anomalies worth considering:

  1. North America, Europe, and East Asia, with a combined GDP of nearly $75 trillion, make up 80% of the world’s GDP in nominal terms.
  2. The U.S. State of California accounts for 3.7% of the world’s GDP by itself, which ranks higher than the United Kingdom’s total contribution of 3.3%.
  3. Canada as a country accounts for 2% of the world’s GDP, which is comparable to the GDP contribution of the Greater Tokyo Area at 2.2%.
  4. With a GDP of $3 trillion, India’s contribution overshadows the GDP of the whole African continent ($2.6 trillion).
  5. This visualization highlights the economic might of cities better than a conventional map. One standout example of this is in Ontario, Canada. The Greater Toronto Area completely eclipses the economy of the rest of the province.

Inequality of GDP Distribution

The fact that certain countries generate most of the world’s economic output is reflected in the above cartograms, which resize countries or regions accordingly.

Compared to wealthier nations, emerging economies still account for just a tiny sliver of the pie.

India, for example, accounts for 3.2% of global GDP in nominal terms, even though it contains 17.8% of the world’s population.

That’s why on the nominal map, India is about the same size as France, the United Kingdom, or Japan’s two largest metro areas (Tokyo and Osaka-Kobe)—but of course, these wealthier places have a far higher GDP per capita.

Continue Reading

Energy

The Top 10 Biggest Companies in Brazil

What drives some of the world’s emerging economies? From natural resources to giant banks, here are the top 10 biggest companies in Brazil.

Published

on

The Top 10 Biggest Companies in Brazil Oct 10 Share

The Top 10 Biggest Companies in Brazil

In 2009, the at-the-time emerging economies of Brazil, Russia, India, and China held their first formal summits as members of BRIC (with South Africa joining in 2010).

Together, BRICS represents 26.7% of the world’s land surface and 41.5% of its population. By GDP ranking, they’re also some of the most powerful economies in the world.

But what drives their economies? We’re highlighting the top 10 biggest companies in each country, starting with Brazil.

What Are the Biggest Public Companies in Brazil?

Brazil isn’t just one of the largest and most diverse countries in the world, it is also an economic powerhouse.

With over 213 million people, Brazil is the sixth most populous country on Earth and the largest in Latin America. It’s also the wealthiest on the continent, with the world’s 12th-largest economy.

Once a colony focused on sugar and gold, Brazil rapidly industrialized in the 20th century. Today, it is a top 10 exporter of industrial steel, with the country’s economic strength coming chiefly from natural resources and financials.

Here are Brazil’s biggest public companies by market capitalization in October 2021:

Top 10 Companies (October 2021)CategoryMarket Cap (USD)
ValeMetals and Mining$73.03B
Petróleo BrasileiroOil and Gas$69.84B
AmbevDrinks$43.87B
Itaú UnibancoFinancial$41.65B
Banco BradescoFinancial$34.16B
WEGIndustrial Engineering$29.43B
BTG PactualFinancial$25.01B
Banco Santander BrasilFinancial$24.70B
Rede D’Or Sao LuizHospital$23.79B
XP Inc.Financial$22.45B

At the top of the ranking is Vale, a metals and mining giant that is the world’s largest producer of iron ore and nickel. Also the operator of infrastructure including hydroelectricity plants, railroads, and ports, It consistently ranks as the most valuable company in Latin America.

Vale and second-ranking company Petróleo Brasileiro, Brazil’s largest oil producer, were former state-owned corporations that became privatized in the 1990s.

Finance in Brazil’s Top 10 Biggest Companies

Other than former monopolies, the top 10 biggest companies in Brazil highlight the power of the banking sector.

Five of the 10 companies with a market cap above $20 billion are in the financial industry.

They include Itaú Unibanco, the largest bank in the Southern Hemisphere, and Banco Santander Brasil, the Brazilian subsidiary of Spanish finance corp.

Another well-known subsidiary is brewing company Ambev, which produces the majority of the country’s liquors and also bottles and distributes PepsiCo products in much of Latin America. Ambev is an important piece of Belgian drink juggernaut Anheuser-Busch InBev, which is one of the world’s largest 100 companies.

Noticeably missing from the top 10 list are companies in the agriculture sector, as Brazil is the world’s largest exporter of coffee, soybeans, beef, and ethanol. Many multinational corporations have Brazilian subsidiaries or partners for supply chain access, which has recently put a spotlight on Amazon deforestation.

What other companies or industries do you associate with Brazil?

Correction: Two companies listed had errors in their market cap calculations and have been updated. All data is as of October 11, 2021.

Continue Reading

Subscribe

Popular