Living Wages and Living Income Worldwide: November Update

Abstract

According to Article 23 of the United Nations Universal Declaration of Human Rights, every individual who works has the right to just and favourable remuneration to ensure them and their families a dignified existence. The 17 United Nations Sustainable Development Goals (SDGs) set for 2030 and adopted by all UN member states in 2015 add urgency to Living Wage implementation, since paying a Living Wage furthers at least eight out of the 17 SDGs (Kingo, n.d.; van Tulder en van Mil, 2022). Moreover, emerging regulations and the requirements for increased transparency such as the 2020 Adequate Minimum Wages Directive and the 2022 Corporate Sustainability Reporting Directive (CSRD) of the European Commission are prompting businesses to increase their focus on social issues and to identify that they are an integral component of their overall sustainability strategy. Not only this, there is increasing pressure externally from investors, ESG agencies and external bodies, including the UN Global Compact that has launched its Forward Faster initiative in which Living Wage plays a prominent role. In response to this global agenda, an increasing number of companies have made strides by committing to pay their employees a Living Wage; some have even been cooperating with their suppliers to achieve Living Wages in their supply chains (Mapp, 2020).

Though definitions of a Living Wage vary, a common underlying concept does exist. Living Wage denotes the minimum income that an employed person needs to meet their basic needs without government intervention in the form of subsidies (Gerber, 2017). Such needs include food, clothing, shelter, childcare, transportation, medical expenses, recreation and modest vacation time. According to Mankiw (2020) the concept of a Living Wage typically does not cover the ownership of property, the repayment of debt, savings for retirement, savings for children’s education, and savings for anything that has to do with emergencies, aside from a small emergency fund. 

Most Living Wage models include the costs of food, rent, transportation, childcare, healthcare, and taxes. Despite the general understanding that a Living Wage makes for ethical and economic contributions, a worldwide standard for calculating Living Wages has still to be set. The present report of November 2023, and the versions of February 2023, May 2022 and February 2022, aim to contribute to a solid foundation for such a global, unified methodological framework. These reports followed a design, already outlined in 2014, to calculate country-level Living Wages for a large number of countries with these characteristics (Guzi & Kahanec, 2014; Guzi & Kahanec, 2019):
1. Normatively based;
2. Estimates sensitive to national conditions;
3. Based on transparent principles and assumptions;
4. Easy to update regularly;
5. Estimates to be published online.

This report shows the updates that happened since November 2023, including Living Income and Living Wage Plus, insights into the role of the data collectors, latest quarterly data, yearly averages and 'guidance' data, Single Income Earner as an option in the Family types, having the option for Peri Urban and Peri-Rural within the regional specificities, and explanations around ethical principles on implementation of Living Wages.