Living Wages on Five Continents: Global Report for 50+ Countries

Abstract

In most countries around the world, a statutory minimum wage is set by law and workers are entitled to this minimum wage. The minimum wage should be regularly adjusted to take account for fluctuations in the cost of living and other economic conditions. 1 Otherwise minimum wage may not provide sufficient level of income to maintain decency for households of minimum workers. This difference is the starting point of the Living Wage: While it is not prescribed by law and, thus, cannot be legally enforced, Living Wage aims at determining the income in order to guarantee a decent living for every working person and their families. Living wage campaigns aim at lifting the minimum wage and to ‘make minimum wage a living wage’. Allowing people to lead a decent life is not only a moral obligation. It also encourages consumption by increasing a country’s purchasing power and by keeping employment rates up. Employers paying Living Wage benefit from lower turnover of employees and higher productivity gains. Despite the general agreement on the ethical and economic contributions a Living Wage would make, no common framework for calculating these Living Wages exists. Most organisations develop their own regional or worldwide model. One such international model determining gross income levels that allow decency has been developed by the WageIndicator Foundation. It is consistent with the methodology developed by Richard and Martha Anker for the Global Living Wage Coalition. 2 The Living Wage calculated by WageIndicator is composed of seven parts: food, housing, transport, health, education, tax and other costs. Living Wages are estimated for a set of common household compositions and under different assumptions about working hours. The WageIndicator approach is innovative as it collects prices inter alia through web surveys. This approach helps to publish timely, reasonably accurate and globally comparable estimates. When necessary, the collection of prices is organized through face-to-face surveys and helped by field workers who can observe market prices. Living Wages are updated every quarter to reflect the fluctuations of prices. WageIndicator presents Living Wages jointly with minimum wages and prevailing wages of workers. In this way it raises awareness concerning the existing gap between Living Wage and minimum wage. The next section introduces the concept of Living Wages calculation, and then Living Wages are presented for more than 50 countries on five continents, starting with Angola and finishing with Zambia . This book presents detailed information about the cost of living in each country.