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Responsible Business

Living Wage and Living Income

It is our mission to work on sustainable livelihoods and increased income. As a standard for a ‘decent income’ we promote the concepts of living wage and living income as a benchmark in the work that we do with our clients. 

Living wage

The discussion surrounding living wage is longstanding; but in the last decade, the knowledge and awareness on the relation between a worker’s income from wages, and their standard of living, has exploded. This is reflected in how sustainability standards have embraced the internationally acknowledged Anker & Anker methodology to calculate living wages, including defining the gap between prevailing wages and the living wage benchmark. As a result, there have been a growing number of efforts towards, and experiences in how to close this gap. This is especially seen in the textile industry, as well as in several agricultural sectors like flowers and bananas.

Living Income

The concept of living income is more recent than that of living wage, and refers to the income of smallholder farmers. Assessing what a living income is for smallholders looks very much like the assessment of living wage for workers, with the consideration of some additional information (such as the extent of home consumption of crops produced, local land taxes, water charges for irrigation etc). As an example, many smallholders do not produce one crop alone, but several. The relative importance of specific crops has to be accounted for in the overall household income. Assessing the gap between the current and the desired situation, therefore, also has to weigh the importance of the specific crop under study, to the overall household economy of the smallholders involved.

As this area of expertise is relatively new, it calls for a testing mindset, and transparency in the underlying assumptions adopted when making calculations. Bridging the gap is also more complicated than for a living wage, as it is needs to consider prices set in a market economy, productivity, and production costs etc.

Fair & Sustainable has expertise in the areas of living wage and living income, with these services offered to public and private sector partners. The services focus on training staff members to better understand the concepts involved, in supporting the calculation of a living wage when no recognized benchmark is available, and in the development of a living income program. Furthermore, we provide concrete advice on how to bridge the gap between the current and the desired situation, to clients who are ready to take concrete steps to achieve wage improvements for workers in their supply chain(s).  

Recent Projects

Advice on closing the living wage gap in the banana sector – Rain Forest Alliance USA, 2022

Consultant: Marjoleine Motz

Coordinating of a living wage pilot in the young plants sector – Fairtrade International, 2018/2019

Consultant: Marjoleine Motz

Advice on implementing a living wage strategy with all suppliers including field test – EOSTA, 2018 & 2020

Consultant: Marjoleine Motz

Projects related to this service

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