Wage growth has significantly outpaced inflation in nominal terms over the past decade, but real income gains remain modest, underscoring structural challenges in the labor market, according to a new study by the Ministry of Family and Human Development. The report found that wages increased by 143 percent in nominal terms over the last 10 years, yet rose by only 23 percent in real terms, highlighting the impact of inflation and productivity gaps on household income.

The study also outlined the scale of workforce expansion needed to sustain long-term economic growth. To maintain an average growth rate of 7.2 percent and meet the country’s “Vision-2050” development targets, total employment will need to exceed 1.8 million by 2035.

Labor demand is expected to be highest in the construction and manufacturing sectors. Compared to 2024 levels, the economy will require an additional 88,100 workers in construction and 69,800 in manufacturing by 2035, reflecting ongoing industrialization and infrastructure development. At the same time, the report highlighted persistently low labor force participation, particularly among young people aged 15 to 24 and women. It called for targeted policies and programs to improve access to employment, skills training, and career opportunities for these groups.

Addressing gender disparities in the labor market could also deliver significant economic benefits. A study by the World Bank estimates that reducing the gender gap in workforce participation could increase GDP per capita by up to 20 percent. The Ministry emphasized that aligning wage growth with productivity improvements will be critical to reversing the decline in labor force participation and ensuring sustainable economic expansion.