Adequate Wages: What are we talking about?

When looking at Minimum Wages, Living Wages and Adequate Minimum Wages in context, which steps can you take?

Step 1. Minimum Wages: Check the Statutory Minimum Wage as applicable in the country, sector, industry, region, age-level etc. The Minimum Wage is the law and is the minimum threshold.

Step 2. Collective Agreements Wages: In countries where there is no Statutory Minimum Wage, where applicable and possible, check the lowest negotiated wages as stipulated in Collective Agreements for your sector, industry or company.

Step 3. Check the 'double decency threshold' for a country (50% of the average wage and 60% of the median wage) as well as the Living Wage estimates for a country and region. In all cases where the Living Wage estimate is the highest: opt for these. 

Step 4. In case the 'double decency threshold' (50%-60%) is higher than the Living Wage Typical Family Lower Bound estimate, take the Adequate Minimum Wage threshold into account, but double check regional variation of Living Wage estimates in relation to this. Adequate Minimum Wages only account for national level, and be mindful of data biases in high income inequality countries or countries with significant low wages overall.

Step 5. Reporting: The Corporate Sustainability Reporting Directive (CSRD)'s reporting requirements require companies to disclose on an 'Adequate Wage'. Depending on the country circumstances, this 'Adequate Wage' might be the Statutory Minimum Wage, a collectively bargained wage in case of no Statutory Minimum Wage, an Adequate Minimum Wage (as per the double deceny threshold (50%-60%) or a Living Wage estimate. In light of the EU Directive on Adequate Minimum Wages, anticipate that Minimum Wage levels across the EU might go up in the next few years. Outside of the EU, it's difficult to calculate averages and median wages and therefore Living Wage estimates should also be taken into account.