How are living wages calculated?

How living wages are calculated is a matter of some discussion, although methods have been developed and applied by a number of organisations including Social Accountability International, the body whose SA8000 factory accreditation many companies use, and the Greater London Authority.  Using these methods in collaboration with locally-based organisations, it is quite possible to come up with an estimate of a living wage for individual countries.

 

Debates about how to calculate and measure a living wage can be avoided by allowing workers and their managers to set wages through bargaining between themselves.. This not only avoids arguments over definitions, it also empowers workers to  take their working conditions into their own hands.  That's why we also demand that companies ensure workers are able to form and join trade unions.

The major disadvantages of this approach are that it does not guarantee that brands or retailers will be willing to pay the new rates, and that most garment workers do not have access to their right to bargain collectively.  With most companies' purchasing practices set up to ensure low costs and maximise profits there is a real risk that companies will simply move somewhere else if higher wages mean buyers or retailers have to pay more for their goods.

This is why the only way wages can really be addressed is on a sector-wide level.  Only by working together can the brands end the downward spiral in prices that they have started and on which their competitiveness depends.  Only then will suppliers have the confidence to negotiate prices that factor in a living wage, and to set meaningful minimum wages.