ILO and Experts Suggest Living Wage Policies for Countries

The International Labour Organization (ILO) recently convened to discuss and propose recommendations regarding living wage policies on a global scale. 

This agreement, finalized during a Meeting of Experts on Wage Policies in February, garnered an endorsement from the ILO’s Governing Body during their latest session.

 The meeting, chaired by Zaskia Nathalie Cely, saw the participation of representatives from governments, employers, workers, and observers. 

Its primary aim was to assess wage-setting processes and recent living wage initiatives, define living wages, and explore avenues for ILO support on policies.

The meeting outlined crucial institutions and principles for wage setting, with a focus on collective bargaining, consideration of workers’ needs and economic factors, promotion of gender equality, reliance on reliable data, and adaptation to national circumstances. 

According to experts, a living wage is defined as “the wage level necessary to afford a decent standard of living for workers and their families, considering country circumstances and calculated for work performed during normal hours.”

Challenges and Opportunities

Despite global increases in real wages, challenges persist, including disparities between productivity gains and wages in certain high-income countries and the prevalence of low-wage workers living in poverty worldwide. 

While recent initiatives on living wages show progress, they often lack adherence to key ILO principles like social dialogue and economic factors. 

The discussion focused on operationalizing living wages, necessitating nuanced strategies such as collective bargaining, gradual progression from minimum to living wages, national ownership, gender equality, and robust data usage.

Addressing root causes of low pay, state involvement in public services, and formalization of the economy.

The Path Forward to Increase Wage

The experts stressed that fair wages are pivotal for economic and social progress, promoting social justice, mitigating poverty and inequality, and ensuring a respectable standard of living. 

The agreement stipulates that estimating living wages must adhere to principles such as evidence-based methodologies, engagement with workers’ and employers’ organizations, transparency, and consideration of regional, local, socio-economic, and cultural contexts. 

To achieve living wages, wage-setting processes should align with ILO principles, strengthen social dialogue and collective bargaining mechanisms, and empower wage-setting institutions.

It was emphasized that living wages should not adopt a one-size-fits-all approach and should reflect local or regional differences within countries.

A sustainable strategy to promote living wages should extend beyond wage-setting mechanisms alone and consider broader factors. 

Despite positive long-term trends in average wages globally, millions of workers across formal and informal economies still earn wages significantly below the cost of living, trapping them in poverty.