INTERNATIONAL RECOGNITION: IDH RECOGNIZES FAIR WAGE NETWORK LIVING WAGES
The FWN passing through the IDH ‘Living Wage Identifier’
The Sustainable Trade Initiative IDH -that works in multiple countries and sectors with over 600 companies- has put in place an interesting initiative to promote the payment of a living wage worldwide. It decided to recognize most reliable methodologies to calculate living wage benchmarks, and has developed for this purpose a Benchmark Recognition Process.
The FWN has encouraged this process from the start by participating in IDH discussions on the process behind living costs and on the fundamental criteria behind their calculation. The FWN also participated in the recognition process, by sharing data, its fieldwork experience notably on a large survey just carried out in India and then in having the different members of its research team interacting with IDH specialists.
The FWN thresholds on the living wage have been recognized by IDH at the beginning of 2021, as highlighted by its ‘Living Wage Identifier’:
The FWN actively supports this process since it is a way to provide more transparency around living wage calculations, and ultimately helps potential users to identify most reliable methodologies and the living wage thresholds they are looking for. IDH notably recognized the FWN ‘Typical Family’ living wage threshold that integrates the basic needs of a ‘typical family’ in the country and region under consideration, and that will take into account:
- A typical family composed of 2 adults + a number of dependents defined along local fertility rates; and
- the average number of income earners in the household.
This ‘typical family’ threshold captures the best what are the local demographics and economic conditions -notably the employment rate- that of course directly influence workers’ and their families’ living standards.
Other living wage thresholds available
The FWN has developed an online living wage database which allows users to find living wage thresholds both at national level (for a country as a whole with more than 200 national living wage benchmarks being available) and at the level of individual regions/provinces/cities within those countries (with nearly 2000 regional living wages thresholds). It is on this platform that the users are able to access the ‘typical family’ living wages recognized by IDH.
The online FWN database also provides additional living wage thresholds, allowing the users to eventually adjust the living wage thresholds to other possible criteria. For instance, we also propose living wage thresholds that are not adjusted by the average number of income earners in the family, in order to make sure that every wage earner would be able to cover his/her family expenditures whatever the number of other income earners in the family. Other adjustments by size of family -for instance for a classical family size of 2 adults + 2 dependents, or for larger families with 3, 4 or more dependents being also available. The FWN online database also allows the users to adjust the living wage thresholds generally provided on a monthly basis in local currency unit, to other different time units (hourly, weekly or annual) and other International currencies (such as USD and Euros) to facilitate cross-country comparisons, and to allow companies to match their internal requirements -as an example, if they collect wage data on an annual basis, they will prefer to use annual living wages.
If you are interested in having access to this online living wage database, please leave your contact details: https://fair-wage.com/living-wage-database/
Examples of brands that decided to have access to our online database
In the future, the FWN will continue to work with IDH to further improve our common way of calculating and collecting living wage benchmarks all over the world with in particular the need to develop a granular approach and cover more regions and localities in the world. In its work to develop and constantly improve its database the FWN works with multiple actors at national level, and with other International actors like the UN Global compact, the OECD and many others. The FWN is also involved in a project with L’Oréal on the possible extension of the ‘living wage’ concept to the ‘living income’ concept, that would more closely match the basic needs of workers under atypical forms of work contracts such as part-time, self-employment, daily work, informal work arrangements etc.