Deep-dive: Living wage
In many countries, people earn wages that are too low to support their families. The legal minimum wage is often too low to provide for daily needs. In some countries, there is no legal minimum wage at all. That means that in many contexts, there is a gap between the actual wage earned and what we call a living wage.
What is a living wage?
A living wage is the wage with which people can achieve a decent standard of living. This includes access to food, water, housing, education, healthcare, transportation, clothing, and other essential needs, including provisions for unforeseen events.
The topic of a living wage is relevant for workers, especially in developing countries. Consider the following examples of workers who often don’t earn a living wage:
- Sewists in the textile sector
- Tanners
- Tea pickers
- Cotton pickers
- Hazelnut pickers
- Miners
Useful tools
- The RVO website Living Wage: a way out of poverty’, provides insights into the topic of living wages.
- The IDH living wage action guide helps companies work towards living wages in their supply chains.
- The ‘global living wage coalition’gathers reliable living wage calculations for various countries.
Homework assignment
After this assignment, you will have a good overview of the products that have an actual or potential risk related to living wage.
- In the previous module, you created an Excel file with the key products and their origins. You indicated whether child labour and low incomes (no living income) are a risk. In this assignment, you will add a column called "living wage."
- Examine whether the lack of a living wage can play a role for each ingredient/raw material. Do this using the CSR Risk Checker and relevant sector reports. It may also be helpful to look at the risks identified by other players in your industry.