We know that international human rights law guarantees the right to decent work that provides fair wages: essentially, a living wage. Governments thus must protect, respect, and take steps to fulfill this right to decent work. (Wages also implicate other rights that governments must protect: as the UN Special Rapporteur on the right to food pointed out after his mission to Brazil, “[o]ne of the main tools that the Government has to protect the right to food of workers is its power to set the national minimum wages.”)
But we also are told by industry and some academics that hiking up farmworker wages too much will lead to job losses, higher farm mechanization, increased food prices for consumers, or all of the above and then some. In addition, the lack of clarity over calculating living wages makes it difficult to hold entities accountable on their living wage claims.
What can we do?
1. I’m not an economist, but I would first question the assumption that we can’t afford to pay increased wages in places like the United States. Seasonal farmworkers in the U.S. currently earn poverty wages. As noted by Philip Martin, a labor economist, raising their wages by 40% would put farmworkers over the poverty line – and if this wage increase were passed on to consumers, a typical household’s “average spending on fresh fruits and vegetables would rise about $15 a year, the cost of two movie tickets.” Given that the average American family of four wastes $1,365 to $2,275 annually by “throw[ing] out approximately 25 percent of the food and beverages they buy,” I see a lot of wiggle room for a legally mandated and enforced wage increase, even if it led to slightly higher food prices.
At the same time, nearly 15% of American households are food insecure, so increased food prices should be met with programs and policies to ensure that these families will not be negatively affected. (Though I would also hazard a guess that raising wages throughout the food industry – including for farmworkers and restaurant workers – would be a good thing for many food-insecure families, simply because those families often contain workers in the food system.)
2. We also need creative solutions at local, national, and international levels. In many countries, consumers and farmers alike would struggle with increased food costs associated with higher farmworker wages. Globally, the most impoverished people spend 50-90 percent of their income on food, and increasing food prices are devastating. But the potential impacts of a higher minimum wage for farmworkers are complex. For example, consider the following: (1) Among the world’s food insecure, about 20% are urban consumers and 20% are farmworkers. Higher minimum wages across the board should help workers in urban and rural areas, even if they increased food costs, but could hurt people in the informal economy. (2) About 50% of the world’s food insecure are small-scale farmers. These farmers generally don’t rely on hired laborers, and, when they do, they may be exempt from minimum-wage requirements anyway, which is the case in both South Africa and the United States. So higher minimum wages might not have much of an impact on these types of farmers — though partly because the workers they hire actually wouldn’t be receiving higher wages, so it’s simply a moot point.
For larger farmers who rely on hired farmworkers, however, it’s a different story. Farmers have little bargaining power, and generally don’t set the price at which they sell their goods. In our globalized economy, with large buyers scouring the world for cheap products, farmers with high production costs are at a disadvantage, especially if coming from developing countries and competing against highly subsidized American and European producers. (Subsidies: a subject for another day!) With high input prices and many fixed costs, farmers also see “labor” — the wages and benefits for workers — as one of the few costs they can control.
This is where it behooves the international community — including governments and consumers — to take a careful look at supply chains and retailers. For example, as the non-profit War on Want has pointed out, Tesco promises living wages and earns record profits … while workers on supplier farms struggle. In the United States, Wal-Mart, the largest grocery retailer – whose CEO earns more in one hour than a U.S.-based farmworker earns in a year – puts extreme pressure on suppliers to keep costs down. Wal-Mart doesn’t claim to pay a living wage, but it does acknowledge a “responsibility to ensure that the products we sell … are produced in an environmentally and socially responsible manner.” Shouldn’t that include wages that allow workers to live in dignity? (Of course, Wal-Mart also pays poor wages to its own workers, nearly half of whom come from poor or near-poor families, so its answer would probably be “no.”)
International consumers have a role to play, in letting their retailers know that they want decent wages paid throughout the supply chain, and in choosing to shop at places committed to ethical sourcing. (Easier said than done, especially in the absence of hard data and full transparency.) Government oversight in importing countries is another option. For example, the UK has crafted a Groceries Supply Code of Practice, which regulates interactions between large supermarkets and their direct suppliers, and has recently appointed a Groceries Code Adjudicator to enforce it. It’s hard to know what kind of impact this will have in practice, as the Code simply prohibits retailers from placing undue pressure on suppliers while allowing regular commercial pressures, but it’s an interesting step, and one to watch.
Creative national policies and actions are also needed. Going back to South Africa (where representatives of farmers and workers have called for a similar ombudsman), the Employment Conditions Commission has recommended a full review of the agricultural sector to address its long-term sustainability, including issues of job creation and retention, agricultural trade and tariffs, and social conditions on farms. The ECC suggests that the National Economic Development and Labour Council (NEDLAC) lead the review, with a goal of creating an Agricultural Charter or other social pact bringing together government, labor, and employers. This type of holistic approach is sorely needed, and a genuinely collaborative effort would be a step in the right direction. I would urge the process to include a human rights-based approach, including opportunities for meaningful participation of those whose rights are affected.
3. For improved accountability, we need a serious international process to create a universally agreed-upon definition of a living wage and method for determining it. Many methodologies for calculating a living wage have already been created – the ILO compiled a number of them in a 2011 review – but the lack of agreement hinders our ability to determine the living wage in any given country.
Greater clarity on how to calculate living wages could help countries determine the living wage within their borders. These national efforts would require expertise, resources, and a lot of work. But a universally accepted methodology, combined with country-specific calculations, would improve our ability to ensure that the human right to decent work is realized. Governments could consider living wage determinations when setting minimum wages; workers could use it when bargaining collectively. And living wage calculations would enable workers and human rights advocates to measure, concretely, how the promises of corporations and industries stack up to the wages actually paid in their supply chains.
Want to know more? Check out the following resources:
- Richard Anker, “Estimating a living wage: A methodological review” (ILO 2011).
- Committee on Economic, Social and Cultural Rights, “The Right to Work: General Comment No. 18” (2005), available for download here.
- Mary Cornish, “A Living Wage as a Human Right,” (Canadian Centre for Policy Alternatives, October 2012).
- “Report of the Employment Conditions Commission to the Minister of Labour on the Farm Worker Sector, South Africa, 2013,” available for download here.