Fair wages must be at the heart of sustainable development

By Namit Agarwal, Social Transformation Lead at the World Benchmarking Alliance

Person counting money in a restaurant kitchen

For too long, sustainability has been viewed by many as an environment-first term. We can’t tackle climate change without involving people and building new systems that improve the standard of living for all. One clear sign of a sustainable world is that people are paid fairly for the work they do.

Here at the World Benchmarking Alliance, we measure companies’ activities against the UN’s Sustainable Development Goals (SDGs), an accepted framework that recognises that the issues faced by the world – be they poverty, health or a thriving economy – are inextricably interlinked.

Understanding the importance of people’s role both as implementers of the transition we need and as recipients of the improvements that it must create, we put social change at the centre of our model for change. Only once people are recognised are we going to be able to create lasting systems transformation.

Measuring companies’ performance in upholding people’s living standards is crucial, and living wage is one of the indicators we use in our benchmarks to assess this.

A living wage is the minimum income necessary for a person’s decent standard of living. It is designed to provide for the basics – like food, water, housing, education, healthcare, transport and clothing, and also to provide financial stability for individuals and families.

From the 6th to 12th of November, it’s Living Wage Week, the annual celebration of the campaign to ensure that workers are paid enough. In the UK, there is a statutory minimum wage for those under 23, which is £10.18 per hour, and a statutory living wage for those 23 and older, which is £10.42. But even the latter falls short of what The Living Wage Foundation calls the Real Living Wage, which its experts put at £12 and £13.15 for London.

Indeed, most countries are struggling to ensure that workers are paid a wage that covers the real cost of living. Likewise, too many of the self-employed – including the world’s subsistence farmers who play an essential role in key commodity markets, like coffee and cocoa – are failing to enjoy a living income. Globally, working poverty is an issue that affects one billion people.

Garment workers in Bangladesh are out on the streets to call for a fair minimum wage. Trade unions and workers are demanding for the minimum monthly wage to be raised to 23,000 taka (£170) from 8,300 taka (£61) to cover their basic needs.

Recently, the UN-appointed expert on poverty and human rights, Olivier De Schutter, wrote to the CEOs of Amazon, Walmart and food delivery app DoorDash regarding reports of inadequate pay, aggressive union-busting tactics and the misclassification of workers as ‘independent contractors’ to deprive them of employment benefits. He asked all three companies to reply to his letter within two months. Only Amazon responded in this timeframe. This silence highlights the problems with relying on voluntary action by companies, rather than reformed law, to safeguard workers’ rights.

The availability of data now makes it easier than ever to pay workers, individual suppliers and self-employed contractors fairly. Businesses with multinational supply chains can use the Living Wage Identifier Tool – created by sustainable trade social enterprise IDH – to find credible living wage benchmarks for every country. There is no justifiable reason not to use it.

In this historic moment, we have an unprecedented opportunity to make our systems better and cleaner. But it will only happen if we make them fairer too. Without the universal provision of a living wage and the protection of worker rights, public opposition to the vast changes required will become too great.

So, putting people at the heart of sustainable development isn’t just the right thing to do. It is core to keeping our planet habitable.

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