The top 10% of highest paid workers in Europe together earn almost as much as the bottom 50%, according to a report from the International Labour Organization that calls on governments and companies to do more to ensure the fruits of economic growth are shared out.

The UN agency used its latest report into global wage trends to examine earnings inequality between different earners within firms and between firms. It also found startling discrepancies between men and women’s salaries at senior level in Europe with a gender pay gap of more than 50% for chief executives.

The report builds on a warning from the ILO director general, Guy Ryder, that income inequality and a rise in casual employment practices risk fuelling nationalist movements. Speaking after Donald Trump won the US election on an anti-globalisation ticket and the UK voted for Brexit, Ryder said people felt they were getting a “raw deal” from the current economic system.

The ILO’s Global Wage Report provided fresh evidence of the inequality that has played a role in the rise of anti-establishment parties. One of its key findings was significant gaps between executives and workers on the shop floor in European companies.

“Wage inequality within enterprises, particularly the large ones, has become very substantial as the top 1% in those enterprises leave others increasingly far behind,” said Ryder, writing in the report.



By comparing the wages of individuals in Europe to the average wage of the firms where they work, the ILO’s researchers found that about 80% are paid less than the average for the firm – because the average is skewed upwards by the big payouts to its highest earners.

In the 1% of firms with the highest average wages, the bottom 1% of workers were paid on average €7.10 per hour while the top 1% earned an average €844 per hour, or 118 times more.

“The payment of extremely high wages by a few enterprises to a few individuals leads to a ‘pyramid’ of highly unequally distributed wages,” the report explained.



Some of the earnings inequality between workers in a country is driven by the types of firms people work for, because some industries pay better than others. But Patrick Belser, author of the report and the ILO’s senior wages expert, said practices within firms were also playing a big role in wage inequality.

“In Europe, inequality within enterprises accounts for almost half of wage inequality. That tells you just having minimum wages is not going to solve wage inequality,” he said.

In addition to minimum wage rates and collective bargaining, inequality could also be cut by firms self-regulating, said Belser. Governments should help with tougher requirements on how firms report pay gaps between both genders and different levels of seniority. “In the medium term, if there is no self-regulation, people might get fed up with high executive pay,” he added.

He also called for more countries to adopt rules like those coming in the UK next year that will force all big employers to publish their gender pay gap. The ILO’s wage report showed the overall hourly gender pay gap for Europe was about 20%.

The gap was found to be higher at the top, and for the highest 1% of wage earners it reached about 45%. Among men and women chief executives the gender pay gap was above 50%. “In the very best paying enterprises almost all CEOs are men,” said Belser.