Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Get in touch with us nowThe impact of inflation and income inequality
Following the COVID-19 pandemic that disrupted production and transport chains around the world and the Russian invasion of Ukraine in February 2022 that caused an energy crisis in Europe, consumer prices skyrocketed in several countries through 2022 and 2023. As a result, real wage growth, which takes inflation into account, was estimated to have declined by almost one percent in 2022. The loss in purchasing power causes worries around the world, and many risk sliding into poverty.Furthermore, while many are struggling to make ends meet, the world's richest 10 percent hold more than three fourths of the global wealth. For instance, in the United States, the Gini index increased since 1990, meaning that income inequality grew. If the gap between the rich and the poor in a country grow too big, trust in a country's government may decrease, as seen in the United States since the early 2000s.
Countries and regions with the highest wages
Worldwide, wages and salaries vary from region to region, between countries, and within countries. Taking purchasing power parity (PPP) into account, Belgium was the country with the highest monthly salaries in the world in 2021. Overall, most of the countries with the highest salaries are found in Western Europe. Looking at national income per capita through the world regions, the highest are found in North America, where the income per capita increased the most since 1970. Income per capita also rose significantly in East Asia and the Pacific, the Middle East and North Africa, as well as Latin America and the Caribbean, underlining the economic development in emerging economies over the past decades.Furthermore, salaries vary significantly between industries. While managing consultants with higher education earned close to 130,000 U.S. dollars annually in 2022, software developers researching at academic institutions earned just above 50,000 U.S. dollars annually. Moreover, salaries tend to be highest within industries dominated by men, such as banking and financing, whereas educational and care work, with a high majority of female employees, usually have lower salaries. Additionally, women are underrepresented in leadership positions. These are just some of the reasons why a gender pay gap still exists worldwide.
