GDP growth has no impact on pay

New Delhi: India has seen an inflation-adjusted salary growth of just 0.2 per cent since the great recession eight years back, while China recorded the largest real salary growth of 10.6 per cent 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 per cent in real terms, with a GDP gain of 63.8 per cent over the same period.

Real growth refers to an increase in salary after deducting the inflation. During the period under review, China, Indonesia and Mexico had the largest real salary growth at 10.6 per cent, 9.3 per cent and 8.9 per cent, respectively.

Meanwhile, some other emerging markets including Turkey, Argentina, Russia and Brazil had the worst real salary growth at (-) 34.4 per cent, (-) 18.6 per cent, (-) 17.1 per cent and (-) 15.3 per cent, 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 per cent worse off in real terms since the start of the recession; whilst people at the top are 30 per cent 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. Globally, the U.S. suffered one of the worst salary recovery.