Why Living Wages?
Across The World, Millions Lack Access To Fair Compensation
Earning a fair wage in pursuit of a decent life is a fundamental human right. Despite this, in 2021 the UN estimated that approximately 689 million people, or 9% of the world’s population, lived below the international poverty line. They earn less than $2 per day (adjusted for purchasing power parity), making their wages much below the cost of living. Therefore, they cannot afford basic necessities for themselves and their families.
Governments world-over try to remedy this by instituting Minimum Wage rates below which workers cannot be paid. Despite their good intentions, these Minimum Wage Rates are often also below the Living Wage. Our data shows that as of April 2024, in 26 countries do the lowest applicable Minimum Wages equal or exceed the cost of living.
Living Wage Payment Ensures That People Can Lead A Decent Life
What is a Living Wage? In March 2024, the International Labour Organisation (ILO) defined the concept of a Living Wage as "the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country circumstances and calculated for the work performed during the normal hours of work".
WageIndicator has one of the largest global Living Wage databases that currently covers 166 countries. Because cost of living varies within countries, we calculate Living Wages for 2700+ regions across these countries, incorporating costs of all households necessities like:
- food,
- drinking water
- housing & energy
- transport
- phone and internet costs
- clothing
- healthcare
- education
- emergency expenses
- mandatory contributions and taxes.
WageIndicator calculates these expenses for 'standard households', 'typical households' and 'single income-earner households'. Standard households consist of two working adults (one works 100% of the total hours allowed, while the second works 80%) and two children. Typical households comprise two adults (one works 100% of the total hours allowed, while hours for the other are based on the employment rate of that country) and where the number of children is determined by the country’s fertility rate.
To calculate Living Wages, a basket of region-specific goods is designed and information is collected through a combination of face-to-face surveys, webshops, and online survey data collection. Per quarter over 400 data collectors across the world conduct these surveys. Their data collection is used to update the database every quarter, ensuring that our Living Wage estimates are up to date.
Want to know more about our methodology? You can read all about it in our Living Wage methodology publication, our extensive FAQ, or get in touch with our team.
WageIndicator Supports Global Organisations With Living Wage Implementation
Living Wage payments create a virtuous cycle that benefits all parties involved. Most obviously, workers can meet the cost of living. This affords a decent and secure life for themselves and their families. Increased purchasing power allows them to consume more, creating larger markets for goods and services.
Businesses also benefit from improved employee satisfaction, increasing productivity and retention. Subsequently, recruitment, training, and dispute resolution costs decrease. Cumulatively, this creates resilient and stable supply chains.
In a world where consumers increasingly seek out ethical companies, Living Wage payment also helps corporations fulfil their Environmental, Sustainable, and Governance (ESG) obligations. It is linked to achieving 8 of the 17 UN Sustainable Development Goals; most directly SDG 1 (No Poverty), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reducing Inequality).
The WageIndicator Foundation has been working with several multinational corporations since 2018. It supplies them with customised datasets that they can use to determine wage rates across their supply chain. WageIndicator also actively works with organisations to assist their implementation Living Wages throughout their operations, helping their workers afford the cost of living.
Next to working with companies, WageIndicator's Living Wage data also actively supports and works with advocacy campaigns and NGOs such as Fair Wear Foundation and Mondiaal FNV to advocate for and advance the payment of Living Wages in sectors such as the garment and footwear sector.
WageIndicator’s Living Wage database is recognised by IDH (the Sustainable Trade Initiative) as well as by B-Lab in their B-Corp Certification process. The European Social Reporting Standards also recommend using WageIndicator estimates, among others. Check out this map about legislation in relation to Living Wages.
Added Value for your organisation
Benchmarking of wages
The WageIndicator Global Living Wage Database supports organisations and companies in carrying out the benchmarking of wages. By getting insight into Living Wage rates for specific countries and regions, your organisation can compare and adjust your employees' compensation and benefits. This is not only suitable to benchmark the total rewards of your own employees. Your supply chain and its workers can also benefit from the Living Wage Database.
Achieving Sustainable Development Goals
The Global Living Wage Database contributes to Sustainable Development Goal 8: Decent Work and Economic Growth, among other Sustainable Development Goals. By paying decent wages, not only small, local firms, but also global firms with thousands of locations can commit to more sustainability around the world.
Getting Worldwide Insights
Next to Living Wage rates, the Global Living Wage Database contains more useful data. For specific countries and regions, the cost of living and Statutory Minimum Wages can be acquired as well. This data can be used for risk assessments, corporate commitments policies, audits, et cetera.
