A question that comes up often when sourcing abroad is determining what the living wage is and how well suppliers stack up.
Article 23 of the United Nations Universal Declaration of Human Rights states that “everyone who works has the right to just and favorable remuneration ensuring for himself and for his family an existence worthy of human dignity.” And, it’s even noted that Plato and Aristotle discussed the concept as they both argued for “an income that considers needs, particularly those that ensure the communal good.”
How are Living Wages calculated?
“A living wage is the minimum income necessary for a worker to meet their basic needs. This is not the same as subsistence which refers to a biological minimum. Needs are defined to include food, housing, and other essential needs such as clothing. The goal of a living wage is to allow a worker to afford a basic but decent standard of living. Due to the flexible nature of the term ‘needs’, there is not one universally accepted measure of what a living wage is and as such it varies by location and household type.”
Social Accountability International identifies the Living Wage calculation as follows:
To verify wages for suppliers, auditors check records over a period of time and conduct employee interviews. Applicable standards include SA8000, ISO 26000, various or organizational-specific such as WalMart or the Electronics Industry Citizenship Coalition.
Social Accountability International posts Living Wage Reports for various areas within China, Africa, Vietnam, etc. View the SAI page here.
Within the United States, MIT provides Living Wage estimates based on states here.
To learn more about supplier social audits and view example example reports, visit Pro QC’s website.