Living Wage Series - Ethiopia - December 2018 - In Ethiopian Birr, per Month

The Living Wage is based on the concept that work should provide an adequate income to cover the necessary living costs of a family. WageIndicator uses prices from the Cost of Living Survey to calculate Living Wage in more than 60 countries. The Living Wage is an approximate income needed to meet a family’s basic needs including food, housing, transport, health, education, tax deductions and other necessities.

The following table summarises the varying expenditure and income needs for the three commonly occurring family household compositions.

Expenditure and Living Wage calculation (monthly rates in Ethiopian Birr)

  Typical family Standard family Single-adult
  from-to from-to from-to
Food 3350-4800 2060-2950 515-735
Housing 3600-6000 3600-6000 2160-3520
Transport 200-215 200-215 99-110
Health 500-1000 500-1000 125-250
Education 450-500 450-500 0
Other costs 405-625 340-535 145-230
Total Expenditure 8505-13140 7150-11200 3044-4845
Net Living Wage 4476-6916 3972-6222 3044-4845
Gross Living Wage 5870-9060 5210-8150 3990-6350

Note: For more details see Living Wage FAQ.

 

Family Living Wages (monthly rates in Ethiopian Birr)

There is not a single answer to what is the adequate cost of living. The result is complex, as the cost of living varies by household composition, location, and employment pattern. The following table presents the Living Wage estimates for a set of most common family household compositions and under different assumptions about working hours.

  from-to
Typical family (two parents + 4.5 children, 1.9 working) 5870-9060
Standard family (two parents + 2 children, 1.8 working) 5210-8150
Two parents and two children, 2 working 4690-7340
Two parents and two children, 1.5 working 6250-9780
Two parents and two children, 1 working 9370-14700
Two parents and three children, 1.9 working 5310-8260
Two parents and four children, 1.9 working 5680-8790
Single-adult without children, 1 working 3990-6350

Note: Results in the table are rounded.

 

Living Wages in Context (monthly rates in Ethiopian Birr)

The Minimum Wage is a national legally binding obligation on employers which often make no reference to a living standard. Living Wage describes the adequate living standard. The common goal of the many living wage campaigns currently taking place all over the world is to lift Minimum Wages levels to those of the Living Wages. WageIndicator presents Living Wages jointly with Minimum Wages, aiming to raise awareness concerning the remaining differences in levels. Living Wages are presented in context with other wage indicators including prevailing wages of workers over recent years.

  2015 2016 2017 2018
Minimum wage 420 420 420 420
Living Wage - Single Adult 3500-6230 3750-6210 3860-6130 3990-6350
Living Wage - Typical Family 5460-8970 5600-8890 5450-8340 5870-9060
Real wage of low-skilled worker - - - 2530-4020
Real wage of medium-skilled worker - - - 3110-4870
Real wage of high-skilled worker - - - 4460-6590

Note: Table shows the lowest monthly Minimum Wage in a country, when available. Reported monthly earnings of workers in low-, medium-, and high-skilled occupations are obtained from the voluntary WageIndicator web survey on work and wages. Results in the table are rounded.

Ethiopia Graph

Food basket and food prices in Ethiopian Birr

The food expenditure is the main component of Living Wage and it is determined by the price of food basket. The food prices are taken from WageIndicator Cost of Living Survey which collects the actual prices of all items necessary to calculate the Living Wage. The composition of the food basket is taken from the national food balance sheets published by the UN Food and Agriculture Organization (FAO). The food basket is scaled to 2,100 calories per person per day that is the nutritional requirement for good health proposed by World Bank (Handbook on poverty and inequality, 2009).

Food item Grams per day Energy (kcal) Price per kilo
Wheat, barley and cereals products 290 940 10-21
Rice 6 22 14-24
Meat (beef, pork, poultry) 23 41 160-200
Oils (soyabean, olive, palm) 8 69 68-70
Sugar (Raw Equivalent) 17 59 19-20
Maize and products 115 397 18-20
Milk - Excluding Butter 121 72 15-22
Vegetables, Other 42 15 14-20
Potatoes and products 18 12 6-7
Butter, Ghee 1 10 188-200
Groundnuts (Shelled Eq) 3 14 60-80
Pulses, Other and products 28 96 35-50
Egg (price per 10 eggs) 1 1 10-30
Sunflowerseed Oil 0 0 75-75
Fish products 1 0 4-4.7
Beer (0.5 liter/pint) 24 12 24-28
Beans 6 20 22-25
Sweet potatoes 39 36 12-20
Bananas 8 5 19-20
Soyabeans 1 4 25-30
Yams 28 28 -
Apples and products 0 0 80-100
Tomatoes and products 1 0 11-16
Onions 6 2 10-15
Oranges, Mandarines 1 0 25-35
Peas 10 34 28-36
Roots, Other 136 204 10-14
Seeds and kernels 0 2 .3-22
Wine (bottle) 0 0 96-120
Cream 0 0 40-96
Olives (including preserved) 0 2 -
Honey 1 4 100-135
Lemons, Limes and products 0 0 25-40
Coffee and products 2 1 90-120

 

WageIndicator Living Wage background:

The WageIndicator Living Wage is set to provide acceptable living standard to a family of a particular size. WageIndicator presents Living Wages for several household types and working hours which reflect the most frequently found real situations in which people have to make a living: 1. Typical family Living Wage is a baseline estimate that respects the country specific conditions. Typical family is comprised of two adults and the number of children is given by country specific fertility rate (the average number of children a woman is expected to have during her lifespan). One adult is working full-time and the working hours of second adult are approximated by national employment rate. The total income earned by two adults paid living wage is sufficient to reach adequate living standard. 2. Standard family Living Wage is estimated for a family composed of two adults and two children (referred to as family 2+2). Living wage is calculated under different assumptions about working hours. These include that both adults work full-time (family employment rate is 2), or at least one adult works part-time or half-time (family employment rate is 1.8 and 1.5), or one adult does not work at all (i.e. patriarchal model with family employment 1). Alternatives refer to trade-offs between leisure and work and define what living wage represents. In every case the total income earned by two adults paid living wage is sufficient to reach adequate living standard. 3. Extended family Living Wage includes family with three or four children. One adult works full-time and the work intensity of second parent is approximated by national employment rate. 4. Individual Living Wage represents an acceptable standard of living for a single individual working full-time.

Data sources: WageIndicator Cost of Living Survey, World Bank Databank Fertility rate 2010-2014, ILO Estimated participation rate in 2017, FAO Food balance sheet in 2013.

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