India saw just 0.2 % salary growth since 2008, China made huge gains

According to a review, 0.2% growth in salary has been witnessed since the great recession eight years back. China on the other hand, saw the largest real salary growth of 10.6% during the same period.

A new analysis by the Hay Group division of Korn Ferry says that 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. While other emerging markets like 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 told ET.

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, told ET.

Frost further added. “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 mark at the senior levels - a market where India still pays less than most countries, but is catching up fast.”

The poorer wage growth is a result of an oversupply of people.

"India has made less progress than some other countries in bringing high value jobs to the country. This has led to poor job growth, therefore an oversupply of un/semi-skilled people, and poor wage growth," Frost said.

U.S also faced one of the worst salary recoveries among the developed countries. Salaries there decreased by 3.1% on average since September 2008, while Gross Domestic Product (GDP) saw an increment of 10.2 per cent.

Canada had the best salary recovery amongst the developed nation, 7.2 per cent salary growth on average, with a GDP gain of 11.2 per cent.
Other nations like Australia stood at 5.9%, France at 5.2 per cent, Germany at 5 per cent and Italy at 2.4 per cent salary growth.

"While overall, global economists point to this recovery as one of the worst in history, there are political, economic and social reasons for the disparate salary fluctuations in different countries," Frost told ET.