Despite a global rise in real wages due to easing inflation in mid-2024, many countries, including the United States and those in the Eurozone, remain below their 2019 wage levels. Data from Stocklytics.com reveals that nearly half of OECD countries are still earning less now than before the pandemic.
Sweden, Czechia, and Italy Among the Worst Hit; U.S. and Major European Economies Also Struggle
The Russian invasion of Ukraine in early 2022 significantly impacted global wages, leading to a drop in real wages for many workers as inflation soared and living costs rose. Even with inflation weakening in mid-2024, over half of OECD countries still report lower wages than before the pandemic. According to the OECD Employment Outlook, people in countries like the United States, Canada, Japan, Australia, and many European nations have less disposable income now than they did five years ago, with notable regional differences.
Sweden, Czechia, and Italy have been hit hardest by this trend. Sweden, known for its relatively low real wages compared to its high cost of living, experienced the largest wage drop, falling 7.5% since 2019. Czechia saw an identical decline, while Italy’s wages fell by 6.9%.
New Zealand and Finland follow closely with 6.2% and 5.9% wage drops, respectively, while Australia, Denmark, Spain, and Canada experienced wage declines between 2.4% and 4.8%. Switzerland, Germany, and Japan reported smaller decreases, ranging from 2% to 0.5%, slightly more than Estonia, Belgium, and Norway. The United States saw a relatively modest decrease of 0.8% in real wages by Q1 2024 compared to Q4 2019.
Lithuania, Hungary, and Poland Lead in Wage Growth Since 2019
While many OECD countries face the challenge of rising living costs and wages below pre-pandemic levels, some have shown resilience. Lithuania stands out with a 16.5% increase in real wages since pre-COVID-19, the largest growth among OECD countries.
Hungary, Poland, Slovenia, and Latvia also saw significant wage increases, with rises of 13.5%, 9.5%, 9.3%, and 9.2% over the past five years, respectively. Portugal, Mexico, and Costa Rica experienced smaller but still notable gains, with average wage increases of 5%. The United Kingdom is the only major European economy to see wages rise during this period, with a 3.1% increase compared to pre-pandemic levels.
