The case for a Living Wage
The concept of a living wage has its roots in early labor movements and social justice advocacy, emerging from the recognition that wages should do more than ensure survival—they should enable workers to live with dignity and fully participate in society. A living wage is designed to provide a decent standard of living, covering essentials such as food, housing, healthcare, education, transportation, and clothing. Unlike minimum wages, which are legally mandated and politically determined, living wages are based on actual costs of living and are often higher.
In March 2024, the International Labour Organization (ILO) reached a consensus on a formal definition of a living wage, marking a significant step toward global wage fairness. The ILO defines a living wage as "the wage level necessary to afford a decent standard of living for workers and their families, taking into account country circumstances and calculated for work performed during normal hours."
There are compelling arguments for implementing a living wage, not least its status as a fundamental human right. Both Article 25 of the UN Declaration on Human Rights and Article 11 of the UN Convention on Economic, Social, and Cultural Rights recognize the right to an adequate standard of living for workers and their families. Moreover, achieving living wages would bring widespread societal benefits, including poverty reduction, economic equity, and social stability.
A living wage isn’t just beneficial for workers—it also makes good business sense. Fair wages improve productivity, reduce employee turnover, and enhance brand reputation. They lead to a more engaged workforce, lower hiring costs, greater consumer trust, and better compliance with evolving labor regulations—ultimately driving long-term profitability and sustainability.
However, achieving living wages comes with challenges. One major obstacle is the accurate estimation of living wages and measuring the gap between these figures and prevailing wages. In recent years, significant progress has been made in establishing standardized living wage benchmarks, which help guide wage-setting in different regions. The Global Living Wage Coalition (GLWC), using the widely recognized Anker Methodology, is one of the leading organizations in this space. Other notable benchmarks include the Asia Floor Wage and the WageIndicator Typical Family Methodology.
Many companies begin by committing to paying living wages within their own operations, but there are growing calls for brands to extend this commitment to workers within their supply chains. This presents unique challenges, as brands often do not directly own the factories where their products are made, limiting their ability to set wages. They may also face weak legal frameworks in their production countries and may be concerned about passing higher costs on to consumers. Despite these challenges, there are still ways brands can influence and support fair wages.
Brands can make an impact by committing to a living wage policy, adopting responsible purchasing practices, and collaborating with suppliers and other stakeholders. They can also advocate for higher minimum wages, increase wage transparency, and support worker unions and collective bargaining to drive sustainable wage improvements.
The realisation of a living wage cannot be achieved by business alone; there must be willingness and action on the part of governments. National campaigns have pushed for the adoption of living wages, with some governments committing to aligning minimum wages with living wage levels. In Ireland, for example, advocacy from the Living Wage Technical Group—comprising civil society, trade unions, and academics—led to the 2022 announcement that a national living wage would replace the minimum wage by 2026. Similar commitments have been made in the UK and India, though the effectiveness of their implementation remains to be seen. The adoption of a standardized definition by the ILO is expected to influence wage-setting policies globally, further encouraging nations and employers to align with the goal of providing a living wage.
FWC supports brands in fulfilling their commitments through living wage assessments based on the Anker Methodology. In collaboration with suppliers, we carefully review compensation documentation to gather accurate and consistent wage data, measuring the gap to recognised living wage benchmarks or reference values. We also engage directly and extensively with workers and stakeholders by conducting interviews both onsite and in their communities to gain a deeper understanding of the local socioeconomic conditions. By working closely with brands, management, and worker or union representatives, we help establish wage remediation plans with clear, sustainable goals for incremental wage increases.
If you would like to learn more about our living wage program, please get in touch with aoife@fwc.ie who will be delighted to learn more about your business and how we can help you.