Make living wages a reality
Ensuring those living in working poverty are paid a living wage that enables them to meet their basic needs — supporting themselves and their families to a standard that is universally considered decent — is fundamental to ensuring a people-centered sustainability approach that leaves no one behind. The Living Wage Analysis Tool (LWAT) helps companies identify actions and further opportunities to provide a living wage to ensure all workers, families and communities can live in dignity. Through showcasing good practices for ensuring a living wage through business operations and supply chain practices, providing an opportunity to measure progress over time and leveraging resources for continuous improvement, the LWAT helps businesses advance the living wage economy by making concrete commitments to assume their responsibilities and deploy their influence within value chains.
Improving the lives of the most vulnerable among us — including those living in poverty — is an overarching theme across all of the UN Sustainable Development Goals (SDGs). Ensuring those living in working poverty are paid a living wage that enables them to meet their basic needs — supporting themselves and their families to a standard that is universally considered decent — is fundamental to ensuring a people-centered sustainability approach that leaves no one behind.
The multiple global crises we are facing have placed tens of millions of workers in a dire situation as they face increasing uncertainties. Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained.
The cost-of-living crisis comes on top of significant wage losses for workers and their families during the COVID-19 crisis, which in many countries had the greatest impact on low-income groups. Rising inflation has a greater cost-of-living impact on lower-income earners.
As the private sector employs two-thirds of the world’s wage-earning population, it has the ability to contribute significantly to global poverty reduction and inequality through the provision of living wages as an essential aspect of decent work.
Ensuring a living wage for all workers benefits core operations, value chains and the wider operating environment and enables businesses to better meet their human rights commitments. While ensuring payment of living wages is often seen as a cost, it can offer a host of benefits to businesses, and therefore should be seen as an investment.
Paying living wages positively impacts business at different levels:
Enhancing business performance via a more motivated, healthier and more productive workforce, greater employee well-being and satisfaction which will impact staff turnover, reducing recruitment and training costs;
Improving supply chain relationships, performance, resilience and transparency which will strengthen value chain stability and more effective risk management.
Offering a pathway to tackle poverty and reduce inequality and helping to create a supportive and stable operating environment that has a positive impact on their reputation with consumers and investors.
From a global perspective, a living wage directly advances several of the SDGs, including Goal 1: No Poverty and Goal 8: Decent Work and Economic Growth, Goal 5: Gender Equality and Goal 10: Reduced Inequalities, and unlocks progress across the full 2030 Agenda.
Disclaimer: The tool is voluntary and meant to be a learning platform and therefore will not serve as a reporting mechanism or certification. Companies may choose to share their results of the LWAT Tool internally and/or with their stakeholders, but it should be noted that the data is self-reported and has not been verified or validated by the UN Global Compact.