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Towards a living wage

Cambodian garment workers travelling to work in Phnom Penh (Credit: Emma Hardy/Oxfam)


'Peace and harmony in the world requires an adequate living wage'

International Labour Organization constitution, 1919

Overview

A living wage does more than keep people out of poverty. It allows them to participate in social and cultural life and afford a basic lifestyle considered acceptable by society at its current level of development.

It is also a human right. When a company does not ensure a living wage is paid, the most vulnerable people in its supply chain suffer as a result. This is unfair and unsustainable.

Oxfam has been researching the causes and impact of poverty wages and the barriers to ensuring that a living wage is paid.

Our recent paper, Steps Towards a Living Wage in Global Supply Chains looks at the positive steps taken in a range of sectors, and provides a framework for deeper change. It highlights initiatives already underway and aims to help companies which source from developing countries to understand the issue and what success looks like from an Oxfam perspective. It includes recommendations, signposts further reading and suggests indicators of good practice.

Research

Poverty wages were a key finding from recent Oxfam studies conducted with companies:

A study of labour standards in Unilever's Vietnam supply chain found wages in its own factory exceeded the legal minimum and poverty line but some fell well short of a living wage, and wages were just above the minimum in the suppliers studied.

study with Ethical Tea Partnership concluded that wages of tea pluckers were below the poverty line in India and below the extreme poverty line in Malawi, despite meeting the legal minimum and providing in-kind benefits.

A study with IPL in Kenya found job security increasing for skilled workers in flower packhouses, but low wages and poor childcare were common. Oxfam calculated that wages could be doubled if just 5p were added to the retail price of a £4 bunch of flowers and earmarked for wages, an increase of 1.25 percent.

This is not just a problem in developing countries. Oxfam's report Working Poor in America highlighted that the US federal minimum wage of $7.25 an hour was well below the poverty line for a full-time worker and has not increased for more than 7 years.

Campaigns and corporate engagement

Oxfam's Behind the Brands campaign has rated and ranked the top 10 global food and drink companies on their supply chain policies against a transparent scorecard of indicators and used public mobilization involving 700,000 people to help drive a race to the top.

The campaign has called out companies with poor scores, then given public credit to meaningful commitments, for instance by Mars, Mondelez and Nestlé to increase women's empowerment in the cocoa industry and Coca Cola's leadership on land rights. The indicators include whether the company has an explicit commitment to a living wage, whether it engages with the trade union IUF, and whether it advocates protection of human rights by governments.

Corporate engagement

Oxfam also acts as a 'critical friend' to companies open to change. For instance, it has continued to engage with Unilever, Ethical Tea Partnership and IPL as they implement the commitments made to improve supply chain standards based on the studies with Oxfam.

For corporations presenting on living wage issues

We've made the presentation below available for anyone who would like to share the ideas from our living wage paper with your peers. It is fully editable, includes key graphics, and can be incorporated into other corporate presentations.

Blogs on the issue of living wage

More and more people are becoming aware of the importance of a living wage. The following is a round up of just some of the recent blogs on the issue from a range of perspectives, including large corporations and unions.

Latest blog posts

Words and actions: lessons from Unilever's supply chain

OPINION: Five years ago, Oxfam and Unilever agreed to an unusual collaboration. Oxfam conducted a study on labour rights in Unilever's... Read more

Supplier treatment: why Tesco and other supermarkets should integrate business and ethics

The actions that large companies take to source their products have direct implications for workers in their supply chains. In the wake... Read more

Gender mainstreaming in Malawi’s tea sector

Together with Oxfam, the Ethical Tea Partnership recently organised a workshop looking at gender mainstreaming in Malawi's tea industry... Read more

How the Behind the Brands campaign has driven change in corporate policy

Over the last three years Oxfam's Behind the Brands campaign has leveraged the power of consumers to persuade the world's largest... Read more