What is a living wage?
A living wage enables workers to meet their needs for nutritious
food and clean water, shelter, clothes, education, health care and
transport, as well as allowing for a discretionary income. Workers
should earn enough to provide for the basic needs of workers and
their families, to allow them to participate fully in society and
live with dignity. Their wages should take into account the cost
of living, social security benefits and the relative standards of
other groups.
Most company codes of conduct provide that the employer pays
the national or local legal minimum wage. But due to bouts of
extreme inflation, currency devaluation or government unwillingness
to adjust the minimum wage to the cost of living, it often badly
fails to meet the most basic needs of the workers and their families.
The CCC model code therefore provides for the payment of a living
wage, i.e. wages and benefits paid for a standard working week
must always be sufficient to meet the basic needs of the workers
and their families, such as housing, clothing, food, medical expenses,
education, and additionally provide some discretionary income
(savings). A living wage must reflect local conditions and may
therefore vary from country to country or even region to region.
Companies sometimes refuse to impose the payment of a living
wage because they argue that it is impossible to establish what
a local living wage is. The CCC considers this a false argument,
reflecting the unwillingness of clothing retailers/manufacturers
to take full responsibility for the often dire social situation
of the clothing workers and their families. Producing companies
should make an effort to establish what a living wage is through
negotiations with local trade-unions and/or labour advocacy groups,
academic and other experts. Retail companies have a responsibility
to pay suppliers sufficiently to cover the cost of living wages,
and to establish systems to ensure that increased payments to
suppliers result in higher wages for workers.
Companies should:
-
Signal to supplier countries that enforcement of labour
standards, including increased wages, will not lead to automatic
re-location in search of cheaper labour
-
Carry out research on the value of workers' current wages
-
Consult with local trade unions, human rights and other
relevant organisations and academics to determine appropriate
living wages
-
Establish prices to suppliers which reflect the cost of
paying living wages
-
Press for the enforcement of workers' rights to organise
and bargain collectively
-
Negotiate the level of a living wage with genuine representatives
of workers
-
Strengthen transparency and accountability
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