The Reality About World Salaries

The average gross annual wage per full-time employee in the USA was $80,116 in 2023, or around $6,676 per month ($2,883/year more than in the previous year).  According to ILO’s Global Wage Report 2024-25, there has been a decline in wage inequality since the early 2000s in two-thirds of countries, both within and between nations. Let us dive deeper into the reality about world salaries.

The global labour market is undergoing significant transformations, shaped by economic, technological, and demographic shifts. These changes have profound implications for salary structures across regions and industries. Post the COVID-19 pandemic, factors such as rising living costs, geopolitical tensions, the climate crisis, and fluctuating economic growth have added layers of complexity to employment trends.

While the global economic outlook for 2025 shows signs of stabilisation, projections indicate weaker growth rates, with an anticipated global growth of 3.2% and inflation settling at 3.5%.

Despite these improvements, disparities in salaries and labour market conditions persist. Variations are evident not only between high-income and low-income nations but also within industries and demographic groups.

Income inequality is a pressing global issue, but the factors driving it often vary widely across countries. 

On one hand, countries like South Africa, with a Gini index of 63.0—the highest globally—still bears the scars of apartheid, where systemic racial segregation excluded Black South Africans from economic opportunities, leaving the top 10% controlling 71% of income. In contrast, the United States, with a lower but strikingly high Gini coefficient for advanced economies, reflects the legacy of slavery and racial segregation, with the top 10% holding 68% of wealth compared to just 3.3% for the bottom 50%. Both nations face economic challenges: South Africa’s high unemployment and unequal land ownership worsen disparities, while in the U.S., stagnant wages and a federal minimum wage stuck at $7.25 since 2009 leave millions unable to afford basic living expenses.

ILO’s Global Wage Report 2024-25

The International Labour Organization (ILO) reports that global real wage growth turned positive in 2023 and 2024, following a period of stagnation. While wages rose faster than inflation during this time, increasing purchasing power for many workers, the trend varied significantly between regions. In emerging economies, real wage growth remained modest yet steady, whereas wage earners in advanced economies only began experiencing real wage increases in 2024. Despite efforts in 2022 and 2023 to adjust minimum wages, these increases often lagged behind inflation, leaving workers in many regions facing challenges in maintaining their standard of living.

The report highlights a decline in wage inequality since the early 2000s in two-thirds of countries, both within and between nations. However, inequality remains persistently high, particularly when considering the earnings of self-employed individuals. In many regions, self-employment is closely tied to the informal economy, characterized by low pay and minimal labor protections. The ILO emphasizes that addressing wage inequality requires targeted government policies to enhance labor standards, promote wage growth, and support workers in informal sectors. For detailed recommendations, the Global Wage Report 2024-2025 provides actionable insights for policymakers worldwide.

Emerging trends in salary structures

Emerging trends in salary structures are reshaping how organizations compensate their workforce, influenced by factors such as remote work, technological advancements, and evolving employee expectations. Key developments include:

1. Hybrid pay models: Organisations are increasingly adopting hybrid pay models that combine location-specific and location-agnostic elements. This approach allows companies to balance competitive compensation with budget constraints, ensuring fairness and equity across diverse regions. For instance, a hybrid model may set a consistent base salary for a role, with adjustments made for employees in higher-cost areas.

2. Focus on benefits: As salary structures evolve, many organizations are enhancing their benefits packages to attract and retain talent. This includes offering flexible working hours, remote work opportunities, and professional development programs. A recent survey indicates that 53% of organisations are prioritising upskilling and reskilling initiatives to address skill gaps and support employee growth.

3. Reskilling initiatives: With the rapid pace of technological change, employers are investing in reskilling programs to prepare their workforce for future demands. The World Economic Forum reports that employers anticipate 39% of workers' core skills will change by 2025, underscoring the need for continuous learning and development.

4. AI and automation: Advancements in AI and automation are transforming industries, leading to the displacement of certain roles and the creation of new ones. This shift has increased demand for professionals in fields such as AI, data science, and cybersecurity, where salaries remain competitive due to the specialized skill sets required. For example, the U.S. Bureau of Labor Statistics projects a 31% growth in information security analyst roles from 2019 to 2029, much faster than the average for all occupations.

Average salaries across regions

North America

The United States stands out as one of the nations with the highest average annual incomes globally, with the figure hovering around $76,770. This robust earning potential is driven by high-paying industries such as technology, healthcare, and finance. Silicon Valley, the epicentre of the tech industry, attracts top talent and offers lucrative compensation packages. Similarly, the healthcare and finance sectors offer substantial rewards for professionals in roles such as physicians, surgeons, financial analysts, and investment bankers.

However, the high cost of living in major urban centres such as New York City, San Francisco, and Los Angeles significantly reduces purchasing power. Housing, transportation, and healthcare expenses in these cities are among the most expensive globally, with housing often consuming a significant portion of earnings.

Canada, while offering slightly lower average incomes compared to the U.S., provides competitive salaries in fields such as engineering, information technology, and natural resources. Moreover, Canada’s comprehensive social benefits, including universal healthcare, enhance the quality of life despite lower disposable incomes.

Europe

Western Europe boasts some of the highest average salaries in the world, particularly in countries like Switzerland and Luxembourg. Switzerland leads the region with an impressive average annual income of $95,490, bolstered by its thriving finance, banking, and manufacturing sectors. The nation’s relatively low taxes and high standard of living make it a preferred destination for expatriates and high-net-worth individuals. Luxembourg follows closely, with an average salary of $89,200, largely driven by its robust financial services industry, which includes some of the world’s largest investment funds and banking institutions.

Countries such as Germany, France, and the Netherlands also offer high salaries, particularly in industries like engineering, pharmaceuticals, and renewable energy. However, Western Europe’s high cost of living, particularly in cities like Zurich, Paris, and Amsterdam, can offset some of these financial benefits.

Eastern Europe, on the other hand, offers lower average salaries in nations such as Hungary, Poland, and Romania. However, these countries are gaining traction as attractive business destinations due to competitive tax regimes, lower operational costs, and a highly skilled workforce. The cost of living in these regions is significantly lower than in Western Europe, making them appealing for both expatriates and locals.

Asia

Asia’s salary landscape is diverse, reflecting the region’s wide economic disparities. In developed economies like Japan and Singapore, professionals enjoy competitive pay scales, particularly in sectors such as technology, finance, and healthcare. For instance, Japan’s emphasis on technological innovation and Singapore’s role as a financial hub has led to attractive salaries for skilled professionals.

On the other hand, developing nations such as India, Vietnam, and the Philippines report lower average salaries due to their emerging economic status. Despite this, these countries are witnessing rapid wage growth fueled by industrial expansion and foreign direct investment. For example, India’s IT sector and Vietnam’s manufacturing industries are growing at a remarkable pace, offering increasing opportunities for local talent.

China, as the second-largest economy globally, offers competitive salaries in urban centres like Shanghai, Beijing, and Shenzhen, especially in technology, manufacturing, and finance. However, the wage disparity between urban and rural areas remains a significant challenge.

Australia and Oceania

Australia’s average annual income stands at $60,840, with competitive wages in industries such as mining, engineering, and information technology. Mining, in particular, plays a significant role in Australia’s economy, offering lucrative pay packages in regions like Western Australia and Queensland. Similarly, IT professionals in cities like Sydney and Melbourne benefit from high demand for their skills.

However, the rising cost of living in Australia’s major urban centers poses challenges for residents. Housing affordability is a pressing concern, with Sydney and Melbourne consistently ranking among the world’s most expensive cities. Additionally, the cost of utilities, transportation, and childcare further impacts disposable incomes.

Africa

Africa remains one of the regions with the lowest average salaries globally, reflecting its ongoing economic challenges. Many nations on the continent are still grappling with issues such as political instability, limited industrialization, and infrastructure deficits. However, there are promising growth areas.

Countries like South Africa and Nigeria have shown potential in sectors such as mining, finance, and technology. South Africa, with its well-established financial markets, and Nigeria, as Africa’s largest economy, are key players in the region. However, income inequality and unemployment remain significant challenges in many African countries.

South America

South America’s salary levels vary widely across countries. Brazil and Chile are among the top performers, offering moderate average incomes compared to global standards. These nations have thriving sectors in agriculture, energy, and manufacturing. For instance, Brazil’s agribusiness sector is a key contributor to its economy, while Chile’s mining industry, particularly copper, drives significant revenue. 

Despite these opportunities, South America faces systemic issues such as income inequality, political instability, and inflation, which impact the purchasing power of salaries. Countries like Argentina and Venezuela are struggling with economic crises, further exacerbating wage disparities.

Factors influencing salaries

Understanding the factors that influence salary variations worldwide is essential for professionals considering relocation or employment in different markets. Key determinants include:

1. Economic development: Wealthier nations with advanced industries and infrastructure tend to offer higher salaries. They often attract skilled workers from around the world, which drives up wages in high-demand sectors. For instance, countries like Switzerland and Luxembourg have average annual salaries of approximately $97,332 and $79,596, respectively..

2. Cost of living: Salaries often correlate with a country's cost of living. In Switzerland, while the average monthly net salary is around $6,467.58, the high cost of housing, healthcare, and other essentials can offset the financial benefits.

3. Taxation policies: Taxation significantly impacts net income. For example, Denmark has an average annual salary of about $67,704, but also imposes some of the world's highest tax rates. Conversely, tax-friendly jurisdictions like Singapore offer average monthly net salaries of approximately $5,060, attracting professionals with their low income tax policies.

4. Industry and Demand: Certain industries command higher salaries due to skill shortages and high demand. The technology sector, for instance, often sees salary fluctuations based on new technologies and the availability of skilled professionals.

5. Education and Skill Levels: Higher education and specialized skills generally lead to better pay. In countries with accessible and affordable education systems, a higher percentage of the population qualifies for well-paying roles. For example, Norway offers average annual salaries around $67,980, reflecting its investment in education and skill development.

6. Government Policies: Minimum wage laws, labor protections, and economic incentives influence salary structures. For instance, Luxembourg has the highest minimum wage set at €2,571 per month for skilled workers aged 18 and over, ensuring a higher baseline wage for its workforce.

The role of remote work

The rise of remote work has significantly transformed traditional salary structures, introducing both opportunities and challenges for employers and employees. Key developments include:

1. Geo-agnostic salaries

Some companies have adopted location-agnostic pay policies, compensating employees based on role and experience rather than geographic location. For example, Help Scout, a remote-first company with over 100 teammates worldwide, updated its salary formula in 2018 to remove geography as a consideration, promoting pay equity and simplifying compensation structures.

2. Global talent competition

Remote work has expanded the talent pool, enabling employers to hire from diverse geographic regions. This shift has led to increased salaries in traditionally lower-paying areas as companies compete for skilled professionals. A McKinsey report indicates that over half of tech companies are considering hiring remote talent from lower-cost regions to maintain competitiveness, influencing salary trends globally.

3. Challenges of pay inequality

Disparities between local and remote workers' salaries can lead to workplace friction. Research suggests that when local employees perceive significant pay gaps compared to expatriates or remote counterparts, it can result in feelings of injustice and decreased morale. A study focusing on employees in China found that such disparities often led locals to view themselves as victims of inequity, highlighting the importance of transparent and fair compensation practices.

The future of jobs and skills: Trends shaping the global labour market (2025-2030)

The global labour market is undergoing transformative changes driven by a combination of technological advancements, economic shifts, and demographic trends. These changes are reshaping industries and redefining workforce requirements. The Future of Jobs Report 2025, based on insights from over 1,000 leading global employers across 22 industry clusters and 55 economies, highlights key trends expected to shape jobs and skills over the next five years. Collectively, these organisations represent more than 14 million workers.

1. Major drivers of transformation: 

The global labour market is being reshaped by five primary drivers: technological change, rising costs of living, the green transition, demographic shifts, and geoeconomic fragmentation. Each driver has a significant impact on how businesses operate and what skills they require from employees.

Technological advancements, particularly in AI, robotics, and energy, are transforming industries at a rapid pace. Broadening digital access is expected to be the most transformative trend, with 60% of employers identifying it as a key driver of business transformation by 2030. This is followed by advancements in AI and information processing (86%) and robotics and automation (58%). These changes are fueling demand for technology-related roles such as AI specialists, cybersecurity experts, and data analysts.

The rising cost of living is another major driver, with 50% of employers expecting it to transform their businesses by 2030. While global inflation is projected to decline to 3.5% by the end of 2025, economic slowdowns and rising living costs are expected to displace 1.6 million jobs globally. This has led to an increased focus on skills like creative thinking, resilience, and flexibility to navigate economic uncertainty.

The green transition is expected to significantly influence job markets, with climate-change mitigation and adaptation projected to impact 47% and 41% of businesses, respectively. This is driving demand for green economy roles, such as renewable energy engineers, environmental engineers, and specialists in electric and autonomous vehicles. Environmental stewardship has emerged as one of the fastest-growing skills.

Demographic shifts, including aging populations in high-income countries and expanding working-age populations in low-income economies, are creating diverse challenges. Aging populations are increasing demand for healthcare roles, while growing working-age populations are fueling growth in education-related professions. Skills in teaching, mentoring, and talent management are becoming increasingly vital.

Geoeconomic fragmentation and geopolitical tensions are driving business transformation, with 34% of organisations anticipating changes due to these factors. Security-related roles and skills, including cybersecurity and resilience, are in high demand as businesses navigate restrictions on trade and investment.

2. Projected job growth and decline 

The period from 2025 to 2030 is expected to see significant shifts in global employment. Over 22% of current jobs are projected to transform, with 14% of roles equivalent to 170 million jobs being created and 8% equivalent to 92 million jobs being displaced. This results in a net growth of 7%, adding 78 million jobs globally.

Frontline roles, such as farmworkers, delivery drivers, construction workers, salespersons, and food processing workers, are predicted to experience the largest growth in absolute numbers. Additionally, care economy jobs like nursing professionals, social workers, and personal care aides are expected to grow significantly. Education-related professions, particularly tertiary and secondary education teachers, are also set to expand.

Technology and green economy roles are anticipated to grow rapidly in percentage terms. Fastest-growing roles include big data specialists, fintech engineers, AI and machine learning specialists, and renewable energy engineers. However, roles heavily reliant on manual processes, such as data entry clerks, cashiers, and postal service clerks, are expected to decline due to increased automation.

3. Skills outlook

As industries evolve, approximately 39% of workers’ existing skill sets are expected to become outdated or require transformation between 2025 and 2030. Analytical thinking remains the most sought-after skill, with seven out of ten employers identifying it as essential. Resilience, flexibility, and agility are also highly valued as businesses adapt to changing market conditions.

Technology-related skills, including AI expertise, cybersecurity, and programming, continue to rise in demand. At the same time, creative thinking, curiosity, and lifelong learning are gaining importance alongside technological skills. Conversely, manual dexterity and endurance are projected to decline in relevance, reflecting the increasing automation of routine tasks.

4. Upskilling and workforce transformation

The scale of workforce upskilling required over the next five years is substantial. It is estimated that 59% of the global workforce will need reskilling or upskilling by 2030. Among them, 29% can be upskilled in their current roles, 19% can be redeployed within their organisations, and 11% are at risk of not receiving the necessary training.

Employers are prioritising workforce transformation strategies to meet these demands. Around 85% of organisations plan to invest in upskilling initiatives, while 50% aim to transition staff from declining to growing roles. Supporting employee health and well-being is also emerging as a key focus for talent retention, with 64% of employers identifying it as a priority.

5. Diversity, equity, and inclusion

The adoption of diversity, equity, and inclusion initiatives has increased significantly, with 83% of employers implementing such programs, compared to 67% in 2023. These initiatives are particularly prominent in North America and among large organisations with over 50,000 employees. Employers are recognising the potential of diverse talent pools, with four times more companies prioritising diversity compared to two years ago.

6. AI and wage strategies

AI is expected to play a major role in reshaping job markets. Half of all employers plan to realign their business operations in response to AI, with 66% intending to hire AI-skilled talent and 40% planning to reduce their workforce in areas where AI can automate tasks. At the same time, wage strategies are shifting, with 52% of employers anticipating an increase in wage allocations by 2030 to align with productivity and retain skilled talent.

The Future of Jobs Report 2025 highlights the critical need for proactive workforce planning, upskilling, and strategic investments to navigate these transformative trends and ensure organisations remain competitive in an evolving global landscape.