G20 china_web

Structural reform and SMEs
39%
Average wage increase in
China between 2007-13
Labour productivity
has increased
significantly since 2009
Annual real wage and
productivity index
120
Labour productivity Index
Real wage Index
115
110
Social and
political tensions
rooted in rising
inequality could
threaten open
economies
Guy
Ryder
105
2007
2008
2009
2010
2011
2012
2013
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decreased in many countries. Declining
employment in large-scale industry
has probably been the greatest cause.
Concerns about low pay and wages lagging
productivity have led to more minimum
wage-setting mechanisms.
I am delighted that the G20 labour and
employment ministers in Beijing on 12–13
July 2016 issued the Sustainable Wage
Policy Principles. They encourage the G20
to expand the coverage of, and compliance
with, minimum wage legislation and to take
measures, adapted to national conditions,
to promote collective bargaining. Requests
for advice from the International Labour
Organization (ILO) on setting and enforcing
minimum wages are at a high level, so we
have launched a new online policy guide.
A key topic is how collective bargaining
adapts to economic pressures and changes
in the structure of production in order to
remain a viable wage-setting mechanism.
I equally welcome the ministers’ focus
on social protection. It remains a powerful
policy tool in eradicating poverty and
rebalancing the inequalities that arise in
market economies.
The ministers’ Policy Recommendations
for Promoting More Equitable and
Sustainable Social Protection Systems
highlight the roles played by such systems
and the need to align them with wage
policies to promote sustainable growth
in incomes, employment and labour
force participation.
There is concern about cost, but social
protection is an investment. It supports
individuals throughout the life cycle, from
birth through childhood into productive
employment and then retirement.
Conversely, a lack of access to social
protection obstructs economic and social
development. It is also associated with high
and persistent levels of poverty, economic
insecurity and growing inequality. Poverty
destroys individuals and communities
and creates economic waste. Women
and men who are hungry, ill and poorly
educated are unproductive. Their children
will likely be, too.
Expanding protection
Building social protection systems takes
time. It depends on the state’s capacity
to distribute benefits and tax incomes
adequately and fairly. Many developing
countries are now expanding their social
protection systems. The G20 can play an
important role in supporting them by
building social protection floors, as called
for in Sustainable Development Goal 1
and ILO Recommendation 202. Promoting
decent work in all its dimensions is vital to
maximising the benefits of globalisation,
technological changes and transitions to
greener economies.
Social and political tensions rooted in
rising inequality and a shortage of decent
jobs could threaten open economies and
societies that respect and value diversity.
The G20 leaders in Hangzhou may well have
such concerns on their mind. They will find
their labour and employment ministers’
declaration very useful. Its balanced
approach is integral to reversing a slide
into a global slow-growth trap. G20
Director General
International Labour
Organization
Guy Ryder has been Director
General of the International
Labour Organization (ILO) since
2012, having held various senior
positions in the ILO from 1999
to 2002 and again since 2010. He
leads the organisation’s action
to promote job-rich growth
and to make decent work for
all – a keystone of strategies
for sustainable development.
He has a background in the
trade union movement and is
the former General Secretary of
the International Trade Union
Confederation.
@GuyRyder
www.ilo.org
G7G20.com September 2016 • G20 China: The Hangzhou Summit 111