LIVING WAGE ANALYSIS TOOL

The Living Wage Analysis Tool is a self-assessment for businesses to provide companies with a better understanding of where they are in their living wage journey. The voluntary tool will help companies of all sectors, sizes and regions to understand the concept of living wage and identify areas where further action can be taken to paying a living wage in business operations and supply chain practices. The tool is based on self-reporting and is meant to be a learning platform. The data is not third-party validated and thus does not serve as a reporting mechanism, auditing tool nor certification.

We recognize every company structure is different, so we leave it to your company to decide how best to utilize the Living Wage Analysis Tool with your country subsidiaries. However, we do note that living wage varies between countries, thus you might find it beneficial for subsidiaries to take at the country level so they can accurately reflect their current country context.

Yes, we encourage all companies of all sizes to take the assessment but we recognize SMEs may have fewer resources and/or capacity and some of the questions on supplier engagement may be skipped.

We encourage companies to take the assessment on an annual basis to monitor the effectiveness of your wage policies and to measure progress over time.

This tool is a public good and is meant to help companies promote and provide a living wage as an essential aspect of decent work to ensure all workers, families and communities can live in dignity. There are no fees associated with this tool.

Congratulations on completing the assessment. Celebrate and share your strengths internally and externally and what steps can be taken to ensure a living wage across your business operations and supply chain, based on the resources provided.

Kindly note, the listed areas of improvement are for your company’s knowledge. No required action is necessary, but we encourage you to take the results into consideration to ensure wages are paid.

If you are having trouble with any of the questions in the survey or are unsure of anything, please reach out to socialsustainability@unglobalcompact.org with any inquiries.

Compliance with the statutory minimum is a prerequisite of lawful business operation. And the statutory minimum wage — whether set through legislation or through negotiation — should provide an adequate wage. The International Labour Organization (ILO) standard on this subject, C131, emphasizes the importance of taking into account both the needs of workers and their families — which is what the notion of a living wage refers to — as well as economic factors. However, in some cases, and for a variety of reasons, current statutory minimum wages do not afford an adequate wage. Hence the need to refer in addition to a “living wage.” The Global Living Wage Coalition defines a living wage as “the remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family.”

To determine the level of a living wage in a particular location — and calculate the possible gap between a living wage and prevailing wages — companies and other actors increasingly refer to living wage “estimates”. These estimates typically estimate the cost of living for a family of a determined size in a particular location — estimating the cost of food, housing, health, education and other essential goods and services or unforeseen events. Estimates involve some important assumptions about the number of workers in the household and the number of wage earners. For example, a particular wage may be sufficient to meet family needs if it is earned by two people in the household, but insufficient if there is only one wage earner.

Living wage estimates or estimates, where they exist, are an important diagnostic tool to identify and focus efforts on gaps. They should also serve to inform — not replace — evidence-based social dialogue, including collective bargaining, and facilitate the setting of wages considered as adequate by the parties involved.

The Preamble of ILO C131 states the need to provide protection for wage earners against “unduly low wages.” It then follows that unduly low wages are wages that do not meet the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups. Note that, while needs are often estimated through “absolute measures” which define minimum quantities of certain goods and services, the needs and aspirations of workers and their families evolve with the level of income and consumption in the country where they live. This is also why, as countries become richer, they define poverty as a relative concept, setting their poverty lines at a certain proportion of the median household income, for example.

Protecting your privacy is a top priority. The data entered into the self-assessment is strictly confidential and the results will never be linked back to an individual company or divulged to the public. Data will be solely used in its aggregate form to better understand trends on living wage and areas needing further support and resources.

Additionally, all data is stored on a modern and fully secured server. All user interactions and data sent to the self-assessment are encrypted using TLS connections that are comparable to online banking encryption. This ensures the complete privacy of all user data entered into the site during the self-assessment.

By using the tool, you will not only benefit from gaining a better understanding of your company’s progress on paying living wages, but you will also contribute to the collection of valuable data at the aggregate level that will inform future work to advance living wages in companies and across supply chains.

While not mandatory, companies are encouraged to voluntarily share their results with their stakeholders as a way to initiate dialogue and action of paying all their direct employees — regardless of employment status — a living wage.

Unless a company makes its results public on its own website or the UN Global Compact releases a report of trends across the aggregate data, all company results are confidential.

No. There are no risks to participating in this assessment. It is merely a learning platform for improving wages.