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The Fair Wage Approach

The Fair Wage concept we present here is a new approach. It is proposed as a consequence of our identification of a CSR deficit – notably on the methodological side – with regard to wage issues, despite the fact that wage problems have multiplied along the supply chain and concerns are increasing among all the major actors.

The aim of this approach is progressively to develop an economically rigorous concept of ‘fair wage’ along a number of key wage dimensions and then to develop robust wage indicators. These different indicators then help to identify a comprehensive and overall assessment of an enterprise’s performance in the wage area.

We first provide a definition of Fair Wages and then propose a list of 12 individual Fair Wage dimensions. All the fair wage dimensions proposed here are needed in the sense that they help to provide one part of the company’s wage story. If one of them was missing, any assessment of a company’s wage practices may risk not capturing one essential dimension of wage practices at the company.

This approach provides companies with the tools and framework they need to better identify the strengths and weaknesses of their wage-fixing system and, therefore, to correct their shortcomings in this complex field more easily.

This process could help in the achievement of definite progress on wage-fixing mechanisms and pay practices along the supply chain and for incorporating wages into Corporate Social Responsibility.

 

[1] This approach was initiated and developed by D. Vaughan-Whitehead. For more details about the Fair Wage methodology, testing, field work and policy issues see his book Fair Wages – Strengthening Corporate Social Responsibility