ILO Principles and WageIndicator Alignment

How does WageIndicator align with the ILO Principles for Estimating a Living Wage? Find out below

ILO Principles and WageIndicator Alignment

In March 2024, the Governing Body of the International Labour Organisation (ILO) came out with Principles on Estimating a Living Wage, as a result of a Meeting of Experts on Wages, including Living Wages held in February 2024. In addition to the principles on estimating a Living Wage, the Governing Body also adopted a definiton for the concept of a Living Wage and key principles of wage-setting processes that should be followed in the operationalization of the concept of a Living Wage. These wage-setting principles can be found on the ILO website.

As WageIndicator, we welcome and fully support the ILO concept of a Living Wage and wage-setting principles that can operationalise Living Wages. Our Living Wage estimates translate the living wage concept into a monetary value. These estimates can contribute to and inform an evidence-based social dialogue for wage setting. The table below clarifies how WageIndicator's Living Wage estimates align with the ILO principles on estimating a Living Wage:

ILO Principle	ILO Principle Description	WageIndicator's Alignment
Overall: Basket of goods and methodological clarity	Methodologies to estimate living wages should be based on an identification and assessment of a basket of goods, using local prices of the costs of at least the following components: food, housing, health and education, and other necessary goods and services, in accordance with national circumstances. This basket should provide for a decent living standard of the worker and his/her family. For some elements in this basket, international standards are well-established and should be used. Furthermore, the methodology should be clear on the family size and the number of wage earners. Living wage estimates should be disaggregated by components and presented in various wage units, including hourly, monthly, quarterly and annual figures, and should be the result of robust empirical analysis of the population, including surveys and censuses, at country or regional level.	WageIndicator uses a detailed basket of goods covering food, housing, healthcare, education, transport, communication, personal care, and childcare. It applies international dietary standards (2,100 kcal per person) and local consumption patterns. Family assumptions are based on fertility and employment rates. Living wages are published in gross/net terms and in hourly, monthly, and annual units. All estimates are empirically grounded via local price surveys, not modelling.
(a)	Estimation of the needs of workers and their families through evidence-based methodologies;	Based on field data collected quarterly from local shops, markets, and households. Covers 182 countries and all regions within and adapts to family needs and local prices.
(b)	Consultation with representative employers’ and workers’ organizations on living wage estimates and involvement of social partners throughout their development, with a view to ensuring national and/or local ownership;	WageIndicator collects prices and calculates estimates independently but regularly consults both local and global employers, trade unions, NGOs, and academics to improve methods and ensure broad relevance. It promotes social dialogue as the path to wage-setting.
(c)	Transparency, including details with regard to data sources and methods of processing, that are open to scrutiny, are comprehensive and replicable;	Detailed methodology, assumptions, and data sources are published in full and are fully accessible. Reports, FAQs, and tools are publicly available in multiple languages. Living Wage estimates are publicly available.
(d)	Robustness of the data in terms of representativeness and transparent data collection methods;	In-person by foot data collection dominates (75% of countries); sample size thresholds, outlier detection, and validation are built-in. Web-based data is <1% and never used on its own.
(e)	Timely public availability of the estimates, data and methodologies;	Public release of data quarterly (four times a year), with Guidance estimates published annually. All are freely available and updated within six weeks after the data collection.
(f)	Specification on whether estimates are gross or net, namely whether items such as social security contributions are included or not;	Gross Living Wages are provided, clearly identifying the employee-side contributions (income tax and social security contributions).
(g)	Regular adjustments to consider changes in the cost of living and the patterns of consumption;	Living Wage estimates are updated every quarter using newly collected price data, ensuring timely reflection of inflation and local cost changes. Updates are based on real prices rather than modelling. Adjustments to the basket are introduced gradually as data becomes available. For example, private car and childcare costs have been gradually integrated as add-ons.
(h)	Quality control, including sound technical review, validation, as well as periodic review for continuous improvements;	WageIndicator uses multi-layer quality checks and user feedback loops with a group of consistent and rotating academics and scholars across the world to cross-check methodological assumptions. Additionallty, it checks and tests assumptions with local researchers, social partners and individual workers in all countries in which it collects and publishes data. From a "practice what you preach" point of view Control Union independently audits the methodology yearly. The audit reports are published for everyone to see. WageIndicator's methodology undergoes a yearly evaluation and review with a selected group of scholars and practicioners.
(i)	Promotion of gender equality and non-discrimination;	Includes gender-specific items (e.g., sanitary products, birth-control) and includes the costs for care, but in general estimates are neutral and universally applied. Equal pay for equal value, fair treatment and decent work principles are supported across WageIndicator platforms and databases.
(j)	Consideration of the regional or local context and socio-economic and cultural realities.	Estimates exist for over close to 4,000 regions across 182 countries (and growing quartery), including urban, rural, peri-urban, and super-rural areas. Regions align with local administrative divisions. Although the survey is standardized globally, it is carried out by trained local data collectors who bring in-depth country knowledge. Local prices are not just collected, they are combined in ways that reflect national realities: for example, the food cost calculation uses country-specific dietary compositions; housing estimates are based on what is considered decent in the local context; and survey questions on social participation help capture regional consumption norms. This ensures that the final estimates reflect real costs and culturally appropriate living standards.

Sources:

ILO Principles:

WageIndicator Methodology: