About living wage
In the past few years, the attention for living wages has increased amongst a wide range of stakeholders. The workers’ right to receive a living wage is embedded in various human rights conventions, including the United Nations Universal Declaration of Human Rights (1948) and several International Labour Organisation Conventions. Although the right to a living wage is a universal human right, wages for the workers in many global supply chains are too low to guarantee a decent standard of living. Global competition puts pressure on prices paid downstream the supply chains which increases income inequalities.
Paying higher wages to workers can provide companies with benefits
Definition of a living wage
According to the definition of Anker & Anker, a living wage is the remuneration received for a standard work week by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transport, clothing, and other essential needs, including provision for unexpected events.
Impact of low wages
Low wages have a negative impact on the livelihoods of workers, their families and the communities in which they live. There are many examples of workers that have multiple jobs or work excessive hours of overtime in order to make a living. Low wages result in workers not being able to provide for their families’ basic needs such as proper food and shelter, or to cope with unexpected events, such as illness. This perpetuates poverty. It also makes workers and especially women more vulnerable to being mistreated or sexually harassed and increases the likelihood of children being sent out to work instead of going to school.
Paying higher wages to workers can provide companies with benefits including:
- Increased worker’s health and morale and reduced absence, resulting in improved product quality and higher productivity
- Attracting and retaining (skilled) workers, resulting in lower turnover rates, and less administrative and training costs
- Improved reputation and opportunities for marketing and PR, also for companies further down the supply chain. See also True Price's exploratory study into the business case for a living wage rose