18 April 2024
The International Labour Organization (ILO), the UN agency that sets global labour standards, recently endorsed the centrality of living wages to social and economic development, justice, and human dignity.
Minimum wages all too frequently amount to nothing more than poverty-level pay since they mark the lowest possible wage permitted. The concept of a “living wage”, in contrast, seeks to advance wage thresholds that comprehensively address the needs of workers and their families, with geographically specific accounting for the price of food, housing, healthcare, education, and essential goods and services. This creates a dynamic in which workers and their relatives can seek to escape intergenerational cycles of poverty and live with dignity – not simply barely survive.
The endorsement acknowledges that minimum wage protections alone are inadequate to protect the nearly two billion people around the world who support themselves and their families through earned wages – that is money earned through labour and ranges from tips and below minimum wage to minimum wage or above.
The report on wage policy endorsed by the ILO Governing Body is particularly exciting because it responds to worker-led initiatives in the global majority to advance living wages. The report cites living wage formulations from worker organisations as well as global multi-stakeholder platforms, business-led strategic discussion platforms, UN implementation tools, supply chain certification, and government-led efforts. The sustained momentum of organising to advance living wages globally across formal and informal sectors has had a significant impact in elevating and prioritising the critical importance of living wages in the global human rights and sustainable development arenas.
Globally, minimum wages are incredibly low, and this new endorsement acknowledges that minimum wage protections alone are inadequate to safeguard working families. In nations both rich and poor, minimum wages have not been adjusted for decades or have seen incremental adjustments that continue to leave workers and their families below the poverty line.
About 327 million wage earners – nearly 20 percent of all wage earners - are paid at or below the applicable hourly minimum wage, according to the ILO in 2021. As a result, hundreds of millions of people around the world cannot afford food, rent, healthcare, and other necessities. Forthcoming Equidem research in the garment industry in Bangladesh found that workers earn as little as $61 a month—not even 12 percent of living wage calculations for the garment industry in Bangladesh advanced by the Asia Floor Wage Alliance.
Many emerging economies have yet to confront the necessity of setting a minimum wage, let alone assuring there is a living wage. In 2020, oil and gas-rich Qatar became the first of the Gulf Cooperation Council states to adopt a non-discriminatory minimum wage that applies to all workers, of all nationalities, in all sectors including domestic work. The law came into force in March 2021. Despite this welcome reform, however, salaries for migrants continue to be low in Qatar. Women and men from Africa and Asia working in Qatar’s hospitality and in construction, building stadiums when the country hosted the 2022 World Cup, told Equidem of monthly wages ranging from 600 to 3,500 Qatar Rials ($165 - $960), with most workers earning between 910 and 1,800 Qatar Rials ($250 - $500) per month.
A Bangladeshi worker employed as a lab technician—testing material on a range of stadium sites including Al Bayt, Khalifa, and Lusail Stadiums—reported a company practice of paying wages lower than the contractually promised rate, and misrepresenting salaries in company books. “I only received overtime my first year,” he told Equidem. “After that they refused to give overtime and began deducting from our wages for different reasons. We ended up getting less than what was written in our contracts. When government inspections took place, they showed them salary books that showed that they were paying us properly for overtime and other extras.”
Another worker employed through a contractor at a FIFA partner hotel told Equidem her salary was just above $250 a month and not what she was promised. “We agreed on 1,500 (Qatari) rials ($411) but I get paid 1,000 (Qatari) rials ($274),” she said.
Workers in Qatar during the 2022 World Cup also said they were not paid for overtime. A housekeeper from India at the Souq Waqif Boutique Hotel described regularly working additional hours without compensation. She told Equidem, “We work six days a week, for nine to 12 hours. We work three hours of overtime at least three times a week. They never pay us overtime.”
At the Crowne Plaza a Bangladeshi worker said, “The work here is very hard. We have to work extra hours without extra pay.”
Meanwhile, according to ILO wage policy experts, 57 million wage earners live and work in countries without minimum wages at all. For instance, Equidem found that in the renewable and digital-platform food delivery sectors in the United Arab Emirates—where there are no minimum wage protections for migrant workers—83 percent of the African and Asian migrant workers interviewed reported being unable to afford healthy and nutritious food.
A solar panel technician from Southern Africa said that his salary had not been raised in five years. “They pay the salary on time, but it’s been the same for the last five years I have worked with them,” he said.
Seventy-seven percent of workers interviewed reported living in overcrowded accommodations with up to 20 people in a room fit for six or fewer workers. This is despite working extended overtime hours up to 84 hours a week.
“My accommodation is shared among 19 people, and this is extremely congested,” an East African worker employed by a subcontractor for Siemens Energy told Equidem.
Notably, 57 percent of workers interviewed for Equidem’s study in the UAE migrated for employment from climate impacted areas of Africa and Asia, highlighting the critical importance of winning living wage protections as part of climate adaptation strategies that seek to safeguard the growing number of climate-impacted migrant workers.
“Every year in my area, there is flooding during the rainy season due to which there is a lot of damage to agriculture and crops,” one Indian worker said. “Those doing agriculture work in our area face a lot of difficulties. There is no use in farming. That’s why I have come here to work.”
Even where minimum wages are in place, in 18 percent of countries, minimum wage protections do not include agricultural workers, domestic workers or both. These legal exclusions of agricultural and domestic workers from wage protections are rooted in entrenched histories of racialized exploitation and disproportionately impact migrant workers and racial and ethnic minorities. Women and informal sector workers are also more impacted by inadequate wage protections. Women are still paid 12 percent less than men, according to the Organisation for Economic Co-operation and Development. Migrant workers, minorities, and women make up much of the agricultural, domestic, and informal workforce around the world, meaning that in places where there are minimum wages, huge swaths of the backbone of the economy are discounted.
Living wages are instrumental to advancing equal remuneration for work of equal value by ensuring that pay is calculated to account for the nature of work, worker skill level, and adequate to address the needs of all workers and their families. It is a critical corrective to wage discrimination, the brunt of which is born by migrant workers, women, and racial minorities.
The ILO endorsement of the importance of living wages is a significant and exciting development and stands to reinvigorate initiatives to advance living wages from worker organisations, civil society, business actors, and in state regulation.
Equidem will continue to track how the world’s biggest and most profitable companies pay their workers, seeking to promote the voice of the global majority and hold powerful state and business actors to account.
Dr. Shikha Silliman Bhattacharjee is a Senior Policy and Innovation Advisor at Equidem and a co-author of Reverse Subsidies in Global Monopsony Capitalism: Gender, Labour, and Environmental Injustice in Garment Value Chains.