By providing a living wage, businesses can support their commitment to human rights and ensure that workers and their families achieve a life of dignity with an acceptable standard of living. Nayla Ajaltouni, coordinator of Collectif Ethique sur l’étiquette, who recently spoke at BSR’s Paris office, took some time to talk with us about why the implementation of living wage has been limited to date, how it can benefit both workers and business, and how changing purchasing practices can make a difference on this issue. Her organization—a network of French NGOs, unions, and consumer organizations—promotes labor rights in the garment industry and its supply chain.
How would you define living wage, and what benefits does it offer?
The living wage concept is based on the need for wages to allow workers to live in decent conditions and to overcome poverty. It is a wage that allows a worker to meet his or her fundamental needs and the ones of his or her family. It builds on the human rights responsibilities of businesses, as defined in numerous international conventions and explained in the UN Guiding Principles for Business and Human Rights, and requires them to go beyond the minimum wage as set by local laws.
Without a set calculation, the living wage is adjusted according to local living standards and is set through an analysis of the various cost components that workers and their families face. These include costs related to basic needs (food, clothing, housing, health), other needs related to life in society (education, transport, health care), and additional discretionary expenses (savings, insurance). It is important to note that the living wage must take into account the fact that a worker often provides for several household members who are dependent on this income and do not benefit from allowances provided by a welfare state.
For workers and their families, the living wage has direct consequences on their health, well-being, and dignity. We have many examples where inadequate wages have led to malnutrition, exhaustion, extended working hours, lack of access to health and education services, poor housing standards, and high levels of debt.
What is preventing the more widespread adoption of the living wage?
Companies most often raise concerns related to the costs of implementing the living wage. While the living wage does increase wage costs, we argue that sustainability is not negotiable, since it’s a matter of fundamental rights. Transnational companies [have the] capacity to provide decent wages.
To help suppliers provide living wages, it is important to address the need for fairer pricing at every stage of the supply chain. Another challenge businesses face relates to the calculation of a living wage level. Asia Floor Wage—a campaign led by Asian organizations to promote the implementation of the living wage for garment workers in 18 Asian countries—has been able to address this second concern by developing a common methodology for the region that can be adapted to suit the needs of different contexts and industries.
On the other hand, we have seen that some factors can contribute to supporting the living wage: Government participation has proven to be critical. To this end, engagement and pressure from multinational companies to local governments can have a strong influence on wages and working conditions and achieving a level playing field within producing countries.
What has is the role of workers and their representatives in building support for the living wage?
Worker representatives play a crucial role, primarily through raising awareness of their labor rights among workers and also through monitoring the implementation of decent working conditions and providing important data and feedback on the calculation and impact of the living wage at local level.
At the international level, union federations help organize workers where mobilization has been absent. Global unions also have helped raise awareness of the issues of working conditions in supply chains and have strengthened the legitimacy of the movement for the living wage at the international level. In producing countries, direct actions by workers have also had an impact on the practices of companies. Strikes and other labor movement have exerted substantial pressure on some suppliers and their buyers.
You spoke about the importance of companies adapting their purchasing practices. What about consumer behavior?
Achieving changes in consumer behavior is challenging because in the garment sector, consumers have [few] viable alternatives. When they do exist, these more sustainable products are mostly sold online or in big cities and are considerably more expensive. However, with the Collectif Ethique sur l’étiquette and the Clean Clothes Campaign, we have been able to raise consumer awareness about the working conditions in the garment supply chain. Consumers do not want to be complicit in these unacceptable working conditions, and we can leverage their awareness to put more pressure on large companies in the sector—particularly those that have a stronger commitment to social responsibility and [want to preserve] their reputation.