Visualizing How COVID-19 Has Impacted Global Wages
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Visualizing How COVID-19 Has Impacted Global Wages

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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.

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The Top Google Searches Related to Investing in 2022

What was on investors’ minds in 2022? Discover the top Google searches and how the dominant trends played out in portfolios.

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Trend lines showing when the top Google searches related to investing reached peak popularity over the course of 2022.
The following content is sponsored by New York Life Investments

The Top Google Searches Related to Investing in 2022

It was a turbulent year for the markets in 2022, with geopolitical conflict, rising prices, and the labor market playing key roles. Which stories captured investors’ attention the most? 

This infographic from New York Life Investments outlines the top Google searches related to investing in 2022, and offers a closer look at some of the trends.

Top Google Searches: Year in Review

We picked some of the top economic and investing stories that saw peak search interest in the U.S. each month, according to Google Trends.

Month of Peak InterestSearch Term
JanuaryGreat Resignation
FebruaryRussian Stock Market
MarchOil Price
April Housing Bubble
MayValue Investing
JuneBitcoin
JulyRecession
AugustInflation
SeptemberUS Dollar
OctoberOPEC
NovemberLayoffs
DecemberInterest Rate Forecast

Data based on exact searches in the U.S. from December 26, 2021 to December 18, 2022.

Let’s look at each quarter in more detail, to see how these top Google searches were related to activity in the economy and investors’ portfolios.

Q1 2022

The start of the year was marked by U.S. workers quitting their jobs in record numbers, and the effects of the Russia-Ukraine war. For instance, the price of crude oil skyrocketed after the war caused supply uncertainties. Early March’s peak of $125 per barrel was a 13-year high.

DateClosing Price of WTI Crude Oil
(USD/Barrel)
January 2, 2022$76
March 3, 2022$125
December 29, 2022$80

While crude oil lost nearly all its gains by year-end, the energy sector in general performed well. In fact, the S&P 500 Energy Index gained 57% over the year compared to the S&P 500’s 19% loss.

Q2 2022

The second quarter of 2022 saw abnormal house price growth, renewed interest in value investing, and a bitcoin crash. In particular, value investing performed much better than growth investing over the course of the year.

IndexPrice Return in 2022
S&P 500 Value Index-7.4%
S&P 500 Growth Index-30.1%

Value stocks have typically outperformed during periods of rising rates, and 2022 was no exception.

Q3 2022

The third quarter was defined by worries about a recession and inflation, along with interest in the rising U.S. dollar. In fact, the U.S. dollar gained against nearly every major currency.

Currency USD Appreciation Against Currency
(Dec 31 2020-Sep 30 2022)
Japanese Yen40.1%
Chinese Yuan9.2%
Euro25.1%
Canadian Dollar7.2%
British Pound22.0%
Australian Dollar18.1%

Higher interest rates made the U.S. dollar more attractive to investors, since it meant they would get a higher return on their fixed income investments.

Q4 2022

The end of the year was dominated by OPEC cutting oil production, high layoffs in the tech sector, and curiosity about the future of interest rates. The Federal Reserve’s December 2022 economic projections offer clues about the trajectory of the policy rate.

 202320242025Longer Run
Minimum Projection4.9%3.1%2.4%2.3%
Median Projection5.1%4.1%3.1%2.5%
Maximum Projection5.6%5.6%5.6%3.3%

The Federal Reserve expects interest rates to peak in 2023, with rates to remain elevated above pre-pandemic levels for the foreseeable future.

The Top Google Searches to Come

After a year of volatility across asset classes, economic uncertainty remains. Which themes will become investors’ top Google searches in 2023?

Find out how New York Life Investments can help you make sense of market trends.

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