Living Wage Series - Peru - December 2018 - In Nuevo Sol, 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 Nuevo Sol)

  Typical family Standard family Single-adult
  from-to from-to from-to
Food 635-835 565-745 140-185
Housing 515-800 515-800 350-490
Transport 165-170 165-170 83-85
Health 100-200 100-200 25-50
Education 300-500 300-500 0
Other costs 86-125 82-120 30-41
Total Expenditure 1801-2630 1727-2535 628-851
Net Living Wage 1001-1461 959-1408 628-851
Gross Living Wage 1160-1700 1120-1640 730-985

Note: For more details see Living Wage FAQ.

 

Family Living Wages (monthly rates in Nuevo Sol)

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 + 2.5 children, 1.8 working) 1160-1700
Standard family (two parents + 2 children, 1.8 working) 1120-1640
Two parents and two children, 2 working 1000-1470
Two parents and two children, 1.5 working 1340-1960
Two parents and two children, 1 working 2010-2940
Two parents and three children, 1.8 working 1210-1760
Two parents and four children, 1.8 working 1300-1890
Single-adult without children, 1 working 730-985

Note: Results in the table are rounded.

 

Living Wages in Context (monthly rates in Nuevo Sol)

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 750 850 850 850
Living Wage - Single Adult - - - 730-985
Living Wage - Typical Family - - - 1160-1700
Real wage of low-skilled worker 970-1260 905-1180 990-1270 950-1190
Real wage of medium-skilled worker 1330-1940 1410-2110 1390-2030 1310-1860
Real wage of high-skilled worker 2360-3770 2450-4020 2460-3920 2280-3520

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.

Peru Graph

Food basket and food prices in Nuevo Sol

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 136 326 3-4
Rice 109 422 2.5-3
Meat (beef, pork, poultry) 62 94 10-13
Oils (soyabean, olive, palm) 15 131 4.6-6
Sugar (Raw Equivalent) 48 170 2.9-3
Maize and products 43 150 1.5-3
Milk - Excluding Butter 138 83 3-4
Vegetables, Other 100 33 2-3
Potatoes and products 184 180 1.5-2
Butter, Ghee 2 13 6.5-10
Groundnuts (Shelled Eq) 4 14 3-5
Pulses, Other and products 10 33 4-4.5
Cassava and products 64 103 1.5-2
Egg (price per 10 eggs) 20 25 3.3-3.3
Sunflowerseed Oil 1 7 4.5-5
Fish products 49 35 8-12
Beer (0.5 liter/pint) 105 37 8-10
Sweeteners, Other 3 12 2.8-3
Beans 5 15 3.2-4.5
Sweet potatoes 16 18 1.5-2
Bananas 7 4 2-2
Soyabeans 4 14 4-5
Apples and products 12 7 2.5-3
Tomatoes and products 13 2 1.5-2
Onions 35 15 1.8-2
Oranges, Mandarines 40 15 2-3
Plantains 96 80 2-2.5
Peas 5 17 4-4.5
Roots, Other 17 11 1.5-3
Seeds and kernels 0 0 8-10
Wine (bottle) 6 4 16-20
Pineapples and products 28 11 -
Cream 0 0 5-12
Olives (including preserved) 6 15 7-11
Honey 0 0 6-10
Citrus, Other 3 1 2.5-4
Lemons, Limes and products 12 3 2-3
Tea (including mate) 0 0 5-8
Grapefruit and products 0 0 2-3
Coffee and products 1 1 7-10

 

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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