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Living Wage

Today, over a billion working people worldwide – one third of all workers – are estimated to earn less than they need to afford a decent standard of living.

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Industry-specific Risk Factors

Working poverty caused by low wages is a global issue and prevalent in many different industries. The two industries below have been chosen as examples, as there is a wide range of research available as well as actions that businesses in those industries can take to improve the wages of their employees and supply chain workers. To identify potential risks related to low wages for other industries, companies can access the CSR Risk Check.

Agriculture

The agricultural industry is vulnerable to poverty wages for workers due to the seasonal nature of work, high prevalence of informal or illegal workers, and the remote nature of a lot of agricultural work, which leaves workers exposed to exploitation and removed from sources of remedy. According to the Global Living Wage Coalition, the concepts of a “living wage” and a “living income” are particularly pertinent when looking at the agricultural industry. While both are about achieving a decent standard of living for households, the idea of a living wage is applied in the context of hired workers (in factories, on farms, etc.), while living income is applied to the context of any income earner, such as self-employed farmers.

Many campaigns and initiatives exist to promote both living wage and living income for agricultural workers, such as the Fair-Trade Foundation and the Living Income Community of Practice.

Helpful Resources
  • Global Living Wage Coalition, ImplementationA range of studies and tools for agricultural industries, including for specific commodities like tea and bananas.
  • Rainforest Alliance, Living Wage Position Paper — Sustainable Livelihoods: Achieving Living Wages For Agricultural WorkersGuidance and information for agricultural businesses on paying a living wage throughout the supply chain.
  • Fair Labor Association (FLA), Fair Compensation for Farmworkers: Emerging Good Practices and Challenges: This report examines compensation-related trends based on FLA farm visits and is intended to help multinational brands better understand the wages paid to workers at the farms from which they source.
  • New Foresight, Driving Improvements in Wages and Working Conditions in the Tea Sector: This report, which was produced in the context of an ILO project, includes studies on banana, tea and coffee.
  • Fairtrade International, Guide for Smallholder Farmer Organisations – Implementing Human Rights and Environmental Due Diligence (HREDD): This guidance was developed to provide advice and tools on HREDD for farmer organisations to implement.

Fashion, Apparel and Textiles

This industry has traditionally been highlighted as one that is rife with human and labour rights violations, including low or withheld wages. Due to COVID-19, in 2020 and 2021, many garment workers have received reduced wages due to cancelled orders, or in some cases have not been paid at all. In response to these risks, the UN Global Compact endorsed a call to action — the COVID-19: Action in the Global Garment Industry — convened by the ILO and coordinated by the International Organisation of Employers (IOE) and the International Trade Union Confederation (ITUC), and including brands and manufacturers, workers and employer organizations, and Governments. Examples of other campaigns and initiatives that aim to improve the wages and working conditions of garment workers include ACTLabour Behind the Label and Fair Wear Foundation.

Workers in the industry are vulnerable to low and inadequate wages for several reasons, including the high sensitivity to economic factors such as the price of clothing in target markets and a lack of strong labour right enforcement in garment-producing countries in South-East Asia. Furthermore, many garment workers are women and home-based workers, who are usually paid less than their male counterparts.

Helpful Resources
  • ILO, Wages and Working Hours in the Textiles, Clothing, Leather and Footwear IndustriesThis report highlights barriers to living wages and has tips for businesses.
  • ILO, Redistributing Value Added towards Labour in Apparel Supply Chains: Tackling Low Wages through Purchasing Practice: This report combines academic and policy information with real-life business case studies on strategies to tackle low wages through purchasing practices.
  • Business & Human Rights Resource Centre, Wage Theft and Pandemic Profits: The Right to a Living Wage for Garment Workers: This report demonstrates how the business model of fashion brands and the structure of global garment supply chains create and sustain poverty wages for garment workers.
  • OECD, Due Diligence Guidance for Responsible Supply Chains in the Garment & Footwear: This guidance helps enterprises implement the due diligence recommendations contained in the OECD Guidelines for Multinational Enterprises along the garment and footwear supply chain in order to avoid and address potential negative impacts of their activities and supply chains. The guidance provides due diligence recommendations on wages and other labour concerns.
  • Fair Labor Association: This international organization has multiple reports on living wage and fair compensation, including in Vietnam and Bangladesh.
  • Labour Behind the Label: The international organization has a range of resources focused on the apparel industry, including wage calculators.
  • Clean Clothes Campaign: The garment industry’s largest alliance of labour unions and non-governmental organizations (NGOs) with multiple reports revealing the state of wages in the industry, including ‘Tailored Wages 2019: The State of Pay in the Global Garment Industry’, ‘Un(der)paid in the Pandemic: An Estimate of What the Garment Industry Owes its Workers‘ and ‘Out of the Shadows: A Spotlight on Exploitation in the Fashion Industry’. Regional and country-specific reports — for example, in CambodiaItalyEastern Europe and Turkey — give further details on wages in the garment industry’s largest hubs.
  • Fair Wear Foundation, Living Wage EngineeringThis report looks at how to implement sustainable living wage processes in the garment sector. The Fair Wear Foundation also has a webpage with a selection of tools for apparel businesses, including wage calculators.