Garment factory worker, New Delhi. Photo courtesy of the Ethical Trading Initiative.
What is a living wage? Ask workers!
“Living wages” is the new buzz phrase. But the idea is an ancient one; that workers should be able to earn enough in a standard working week to support their families in dignity.
Nowadays politicians, charities, campaigners and multi-stakeholder initiatives like the Ethical Trading Initiative are all debating how to achieve this golden standard of living wages across global workforces. How to calculate a living wage? How to ensure that it is paid? How to ensure employers stay commercially viable while paying it?
In the year that I have been working closely on this issue with ETI members (companies, NGOs and trade unions) and talking with people all over the world who are working on it, one solution comes up repeatedly; freedom of association.
How to calculate a living wage? Talk to the trade union. Nobody knows better than workers how much they need to live on. By all means triangulate what they suggest with statistical analysis of local living costs and typical family structures, but ultimately the scrutiny of people who struggle day by day to make ends meet is the best possible research into exactly how much families need, not just to survive, but to live in dignity.
How to ensure workers are paid this amount? Talk to the trade union. Negotiation between workers’ representatives and employers – by which I mean open and honest dialogue in the spirit of genuinely seeking a mutually beneficial plan for wage progression – will help to ensure workers get what they need while the business stays commercially healthy.
Of course, trade unions cannot solve the problem alone. Consumers and brands need to be willing to pay prices that enable the payment of living wages; production needs to be efficient so that precious resources that could go towards wages are not wasted; and governments need to use inclusive pay setting mechanisms (ie involving legitimate workers’ representatives) to set legal minimum wage levels that keep pace with inflation.
If this seems a utopian pipe dream, consider the eight international garment retailers – all ETI members – that recently wrote to the Cambodian government to insist that the minimum wage is increased… and pledging to pay higher prices to make this possible. They were prompted to act partly by Cambodian trade union campaigns. It is just this kind of collaboration between unions, companies and government that could help achieve that elusive goal of living wages for everybody.
Sabita has contributed a blog as part of Living Wage Week, a UK-wide celebration of the Living Wage and Living Wage Employers. Living Wage Week takes place each November running from 2nd – 8th November this year.