Searching for Substance in Living Wage Pledges

Around the world, we depend on farmworkers to grow and harvest our food; we just don’t want to pay them enough so that they can afford the food themselves. As discussed last week, international human rights law guarantees a right to decent work, which includes fair wages that enable workers to support themselves and their families. Arguably, this right to “decent work” requires the payment of a “living wage,” which, at its core, is defined as a wage that supports a basic, and decent, standard of living.

A problem of clarity
One major obstacle, however, is the lack of a universally accepted method for determining what constitutes a living wage or how it should be measured. Years ago, the UN Special Rapporteur on the right to food called for work to be undertaken on establishing an agreed-upon methodology. As far as I know, there has not been much movement to do so.

The UN Global Compact notes that there exists “a distinct lack of consensus … as to what the payment of a ‘living wage’ actually means, how it should be calculated, and how it should be implemented … As a result, designing and implementing a living wage programme can be a complex process ….” As an ILO paper points out, this lack of clarity allows some entities to avoid their obligations, while also preventing genuinely interested parties from taking action.

Take, for example, the wine and fruit industries in South Africa. WIETA (formerly the Wine Industry Ethical Trade Association) guarantees that its members will pay workers a living wage, defined as “enough to allow employees and their households to secure an adequate livelihood. This should be sufficient to meet basic needs such as food, clothing, shelter and education, and to have money left over for discretionary spending.” (WIETA Code 8.1) Yet WIETA does not explain how it determines what this living wage is, and WIETA does not provide information on how many farmworkers in the wine industry’s supply chain receive this living wage. In a recent opinion in the Guardian, the best that Su Birch, CEO of Wines of South Africa, can say is that they “believe in a living wage” and “call for farmworkers to be paid” one. But this vagueness instills little confidence, especially since it is coupled with her argument that it is “up to the government” to address the low minimum wage.

The South African fruit industry doesn’t bother with a vague reference to a living wage; its ethical trade program (SIZA) simply calls for workers to “receive remuneration at least equal to the national minimum wage.” Though not aspirational, at least it’s credible. But let’s look further up the supply chain to Tesco, a U.K. company that is a major importer of South African fruit. Tesco is a member of the Ethical Trading Initiative, and thus pledges to pay “living wages.” Yet in a Guardian article about the farmworker wage protests in South Africa, Tesco’s director of ethical trading is quoted as saying that “it is not for us as a company to dictate to a foreign country that ‘you must pay X.’ I think the African National Congress government would query us for saying such a thing.” They’ve been making similar statements for years. (To be fair, most ETI members seem to have difficulty with their promises to provide a living wage. A 2008 ETI briefing paper acknowledged that urgent action was needed, and reminded members that “in many countries, the minimum wage falls way below any living wage estimations, so there’s usually little danger that workers will be paid too much!”)

In the absence of hard numbers, it is difficult to ascertain whether there is any substance behind lofty pledges to pay living wages. But if a universally accepted living-wage methodology were created, and a living-wage amount set, it would be fairly easy to determine whether WIETA’s code of conduct, or Tesco’s ethical trading program, or any other initiative that guarantees a living wage was being adhered to.

Please come back next week for the final post on living wages:  suggestions for moving forward.

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