According to the International Labour Office’s (ILO) latest Global Wage Report’s appendix on Asia and the Pacific, available on its Web site, real wage growth has been very strong in the Asia and Pacific region in the past 10 years.
a. Find data concerning real wage growth in various parts of Asia since 1999 (table 1). Compare the following:
i. The pace of real wage growth of Asia with that experienced in the “Developed economies” since 1999.
ii. The growth of real wages across various sub-regions within Asia. What do you observe?
b. A good chunk of real wage growth in Asia has to do with growth in output. How much of it can be related to techno-logical progress, and why?
c. While this chapter seems to indicate that low-skilled workers may suffer the most in times of technological progress, what does the example of the Asian garment industry, illustrated in Box 1 of the ILO report, tell you about the relationship between real wages and low-skill work in fast growing economies?
d. This chapter seems to indicate that low-skilled workers may suffer the most in times of technological progress. The ILO’s report quoted above dedicates one page to the case of the Asian garment industry, which has undergone rapid change over the past few years. This fast-growing industry is notoriously characterized by low wages and poor working conditions. However, according to the ILO, “Global garment buyers increasingly prioritize productivity and reliability of supply, and they are adverse to the reputational risks of poor working conditions.” What does this case tell you about the relationship between real wages and low-skill work in fast growing economies?