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Global Wage Inflation & Economic Trends 2022

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Summary The economic growth has slowed down in most of the developed and developing countries globally. Adding to the effects of the COVID-19 pandemic, Russia's invasion of Ukraine had a strong negative impact on the world economic situation. This is further leading to a significant increase in global inflation to multi-decade highs. Because of resurgent global demand, supply chain constraints, and skyrocketing food and energy costs, particularly since the Russian Federation's invasion of Ukraine, worldwide inflation has increased significantly from its low in mid-2020. Markets expect inflation to peak in mid-2022 and then decline. The accelerated inflation and the sluggish economic growth are increasing the risk of recession globally. Wage inflation: With the rise in inflation, wages have increased globally. However, the historic high inflation has raised the commodity prices too high, resulting in minimal real wage growth. Since wage growth is not in line with the growing inflation, labor unions across the world are demanding to further increase wages. According to many economists, the further rise in wages will create a wage-spiral effect, adding more pressure to inflation. To deal with this, federal banks have increased the interest rates to minimize the borrowing power and keep the spending low to contain inflation. Employment: The majority of countries are experiencing acute labor shortages. For instance, in the United States there were 11.9 million job openings in March 2022, compared to just 5.9 million unemployed people. Furthermore, Europe's two largest economies, Germany and France, are facing significant growth challenges due to a severe shortage of skilled workers in critical industries. In addition to the current tight labor market conditions, developed economies face another serious concern from an aging workforce. The growth of employees above age 65 is significantly higher than that of employees between age 15 and 25. This could leave a massive gap in the labor market in the near future. Randstad Intelligence wage inflation & economic trends This document and any attached materials contain confidential information and are the sole property of Randstad Sourceright. They shall not be duplicated, reproduced, disclosed or appropriated in any manner without the prior written consent of Randstad Sourceright. 3 UK Germany France USA Netherlands Wage inflation Australia Recession Summary

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