Wage growth in Asia and the Pacific is outperforming most of the world, but progress is unevenly spread across the region, new research has revealed.

A research note from the International Labour Organization's (ILO) Regional Office for Asia and the Pacific, shows real wages in the region grew by 6% in 2013, significantly above the global average of 2%.

"These substantial wage gains have helped to translate economic dynamism into higher incomes and living standards," authors noted.

The picture, however, is uneven, with significant differences between the three sub-regions - East Asia, South-East Asia and the Pacific, and South Asia. While real wages have tripled in East Asia since the start of the century, mainly thanks to China's rapid growth, in the other sub-regions growth has been more modest and wages have risen by little more than 50% in the same period, the report found.

In addition, a third of Asia Pacific's workers and their families remain below the international poverty threshold of US$2 per day. Authors say the inequality is also increasing and the weakness of wage-setting institutions in many countries means that the benefits of growth have not been spread as widely as would have been feasible.

Wage growth has been strongest in East Asia, with average real wage growth of 7.1% in 2013. In China, the rapid growth of wages has led some observers to declare that country's competitive edge is being undermined.

However, the report found that despite rising wages, China remains highly competitive, because it now competes on productivity rather than low wages, and its comparative advantage is gradually shifting away from labour-intensive sectors such as garments towards higher-value added activities such as electronics.

In South-East Asia and the Pacific, minimum wages have played a major role in reviving wage growth, the report noted. Average real wages here grew by 5.3% in 2013. In past years, wage growth had been significantly lower - despite robust economic performance, leading to a disconnect between productivity gains and wages.

In South Asia, wage data are less comprehensive than in other parts of Asia Pacific, meaning that the estimate of slowing real wage growth (from 6.4% in 2008 to 2.4% in 2013) needs to be treated with caution, authors noted. However, this points to a slow growth in wages, which is a cause for concern.

The report recommends three areas for policy action; a strengthening of minimum wage-setting institutions, a strengthening of collective bargaining, and the collection and dissemination of more comprehensive, timely data on wages to form a sound basis for policy-making.

Click here to view the full report.