Living Wages for Migrant Workers?
Minimum Wages are related to where people work and live - very often to where the employee's office is. But what about Living Wages? Do Living Wage estimates follow the same pattern?
In March 2025, Paulien Osse, WageIndicator's Global Lead on Living Wages, and Daniela Ceccon, our Director of Data, talked about the questions they get from clients on this subject.
Paulien Osse: Dani, some clients—particularly large firms—believe that the Living Wage estimates for Singapore are too high. They argue that many employees commute from Malaysia rather than live in Singapore. Should companies apply the Singapore Living Wage to employees residing in Singapore and the Malaysian Living Wage to those living in Malaysia?
Daniela Ceccon: People are people, and Living Wage estimates should not encourage pay discrimination. They must align with the principle of equal remuneration for work of equal value, meaning that within the same workplace, one Living Wage should apply to all employees, regardless of their place of residence.
By definition, the Living Wage ensures that a worker in a given area can afford a decent standard of living. It cannot be designed to apply selectively to local or migrant workers; it must remain the same for all. In the scenario you described, this means that the Singapore Living Wage should apply to all workers in a factory located in Singapore, irrespective of where they live.
Paulien: One might argue that the applicable Living Wage should be based on the region where the factory is located, reflecting the cost of living of workers who live and commute within that region. But what if the region extends beyond national borders?
Dani: There are several reasons why cross-country regions cannot be considered in Living Wage calculations. One practical reason is that national-level variables—such as fertility rates, tax policies, and social security contributions—are integral to Living Wage calculations. It would be extremely difficult to establish a single Living Wage across two different countries.
Moreover, using the lower Living Wage (Malaysia’s, in this case) would be unfair to employees living in Singapore, who cannot be expected to relocate to Malaysia just to afford a decent standard of living. This reinforces the need to apply the Singapore Living Wage in the example you provided.
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Paulien: What if someone works in Switzerland but lives in France? Which Living Wage estimate should be applied?
Dani: The same principle applies: the Living Wage should be based on where a person works, not where they live. Switzerland has a significantly higher cost of living than France, and the Swiss Living Wage reflects this reality. If companies were to apply the lower French Living Wage to cross-border workers, it would create an unfair wage gap between employees doing the same work in the same workplace.
Additionally, expecting workers to relocate to a lower-cost country simply to meet a Living Wage standard contradicts the purpose of a Living Wage—to ensure that all workers, wherever they live, can afford a decent life based on the cost of living in their place of employment.
For these reasons, a person working in Switzerland—regardless of whether they live in France, Germany, or any other neighbouring country—should receive a wage aligned with the Swiss Living Wage estimate.
This also raises an important question: Are these workers actually migrants? Many are not traditional migrants but rather non-local workers living near the border who find it easier or more affordable to commute.
Paulien: In Saudi Arabia, the Minimum Wage system excludes non-Saudi workers. Should the same principle apply to the Living Wage? For example, how should we determine the relevant Living Wage for workers from Kerala, India, who are employed in Saudi Arabia? And what about their Minimum Wage?
Dani: Minimum Wage is a legal concept and must be applied according to national legislation. If Saudi law stipulates that only Saudi workers are entitled to a Minimum Wage, then non-Saudi workers have no legally mandated Minimum Wage.
However, the Living Wage is different. As explained earlier, it must apply equally to all workers in the same workplace, regardless of nationality or residence. In the case of migrant workers from Kerala working in Saudi Arabia, the relevant Living Wage should be based on Saudi Arabia, not India.
This is because their daily expenses—such as housing, food, and transport—are determined by local Saudi prices, not by the cost of living in Kerala. Using an Indian Living Wage for workers in Saudi Arabia would create an unjust wage disparity within the same workplace and undermine the principle of equal pay for equal work.
Paulien: Well, if you ask me, migrant workers should be paid more (a higher Minimum Wage) than local workers since they incur certain costs that locals do not have to bear, such as documentation costs, remittance fees, and communication expenses (e.g., purchasing internet packages to stay in touch with family).
Check out our global Minimum Wage database here!
Paulien: Does the ILO provide guidance on which Minimum Wage should be applied in a given country? If so, should we align those recommendations with our Living Wage estimates?
Dani: The International Labour Organization (ILO) provides guidelines on wage-setting policies, including recommendations that Minimum Wages be fair, adequate, and regularly adjusted based on economic conditions and living costs. However, the ILO does not set specific Minimum Wage levels for each country; instead, it provides general principles for national wage-setting.
Minimum Wages are often influenced by political and economic factors, whereas Living Wages are based purely on the actual cost of living required to meet basic needs in a given region. As a result, statutory Minimum Wages frequently fall below Living Wage thresholds and fail to guarantee a decent standard of living.
Instead of aligning with Minimum Wages, Living Wages estimates should remain independent and reflect real living costs. That said, Living Wage data can serve as an important tool in advocating for higher Minimum Wages.
Paulien: And what if you work from Nairobi, while all your colleagues are based in Brussels? Is the Nairobi Living Wage relevant, then, or should your salary be aligned with the pay levels of your colleagues in Brussels?
Dani: Good question, but this is a different topic, let's discuss that next time!
March 2025
