“Workers lose ground in the global recovery”

Workers’ share of the spoils of economic output has not recovered from a sharp drop seen after the Covid-19 pandemic, according to data that points to worsening economic inequalities as the rollout of generative AI gathers pace.

Estimates by the International Labour Organization, published on Wednesday, show that the share of global gross domestic product earned by employees and the self-employed fell from 52.9 per cent in 2019 to 52.3 per cent in 2022 and had remained flat in the following two years.

The trend marks a sharp acceleration of a long-running decline. The ILO said labour’s share of global GDP had fallen 1.6 percentage points since it first began publishing data in 2004 — representing a loss of $2.4tn after adjusting for inflation — and that 40 per cent of the drop had taken place since 2019.

Steven Kapsos, head of data production and analysis at the ILO, said the decline was “a strong sign of rising inequality” between workers and the asset-rich and should alert policymakers to the risk of technological change hurting workers…

Economists give various explanations on why workers’ share of the pie has shrunk over time, including globalisation, unions’ waning power, and the rise of “superstar” companies that share less of their profits with their employees…