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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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Will Tesla Lose Its Spot in the Magnificent Seven?

We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.

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Will Tesla Lose Its Spot in the Magnificent Seven?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.

All figures are as of March 12, 2024, and are listed in the table below.

RankCompanyYTD Change (%)
1Nvidia90.8
2Meta44.3
3Amazon16.9
4Microsoft12
5Google0.2
6Apple-6.7
7Tesla-28.5

From these numbers, we can see a clear divergence in performance across the group.

Nvidia and Meta Lead

Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.

The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.

Apple and Tesla in the Red

Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.

Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.

Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.

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