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NEWSLETTER 20, Dec 2005
Frequently Asked Questions
What is a living wage?
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The CCC Model code provides for the payment of a "living
wage". But what exactly is a living wage?
Most company codes of conduct call upon employers to pay
the national or local legal minimum wage. But due to extreme
inflation, currency devaluation or government unwillingness
to adjust the minimum wage to the cost of living, minimum
wages often badly fail to meet the most basic needs of workers
and their families. A living wage means that 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 call for 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 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:
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Signal to supplier countries that enforcement
of labour standards, including increased wages, will not
lead to automatic relocation in search of cheaper labour
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Carry out research on the value of workers'
current wages
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Consult with local trade unions, human
rights and other relevant organisations and academics
to determine appropriate living wages
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Establish prices to suppliers which reflect
the cost of paying living wages
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Press for the enforcement of workers'
rights to organise and bargain collectively
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Negotiate the level of a living wage with
genuine representatives of workers
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Strengthen transparency and accountability
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