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Income inequality rising in East Asia: UN labor agency

As the powerhouse economies of China and South Korea transform East Asia, the region faces new challenges, including greater inequality in incomes, schooling and job opportunities, the UN labor agency said in its annual report yesterday.

The region's labor market has not kept up with its economic advancement, the International Labor Organization (ILO) said.

Average working hours are longer than in other regions, sometimes exceeding 50 hours per week, while the state of workplace safety and health conditions, as well as workers rights, remains in many cases unsatisfactory, it said.

"Inequality has risen, not just in income levels, but also in schooling and access to basic services," the agency warned in its Global Employment Trends report.

But the number of working poor in East Asia -- those living on less than US$2 a day -- fell to US$347 million or 44.2 percent of those in work, it said.

A decade ago the percentage of working poor was 61.9 percent, or US$442 million.

The unemployment rate in East Asia rose 0.1 percentage points to 3.6 percent, well below the global unemployment rate of 6.3 percent last year.

However, the employment-to-population ratio for the region -- the share of the working-age population that is employed -- was 71.6 percent, the highest in the world.

However, the report noted that wage growth lags behind productivity gains.

In China, for example, labor productivity in manufacturing rose by 170 percent between 1990 and 1999, while real wages increased by slightly less than 80 percent.

To deal with the problem, both wage structures and working conditions will need to be improved as the economies march forward, it said.

China could face a labor shortage in the future if it doesn't do more to train workers to give them skills, ILO officials warned.

"We already see that especially China is getting to a point where they have to deal with a shortage of labor," Dorothea Schmidt, the report's author told reporters in Geneva.

That is "one of the reasons why we say that especially in China the big, big youth part of the population which does not have a job, or does not have a satisfying, decent job, would have to train them to become the driving force for development in the region," she said.

Women also continue to face more difficulties in labor markets than men, it said.

In Southeast Asia and the Pacific, the unemployment rate stayed steady at 6.6 percent last year. However, it said 59.6 percent of the regions' workers had family incomes below US$2 a day.

"The greatest challenge is to create decent and productive jobs, not just any jobs to reduce poverty and slash the number of working families but still living in poverty," said Linda Wirth, director of the ILO Sub-regional Office for the Southeast Asia and Pacific regions.

In South Asia, employment has not been able to keep pace with the growth of the working age populations.

Tackling illiteracy, lack of social protection, youth unemployment and poor wages and working conditions should be priorities, the report said.
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