The Right to an Adequate Living (Wage)

The current worldwide economic downturn, caused by the COVID pandemic, has brought with it mass unemployment and a precarious job market. One way to ease this impact is to plan for the long term – for example, by implementing an adequate living wage.

Eine Frau mit Kind auf dem Rücken verkauft einem Mann frittierte Kartoffeln auf einem Markt in Lilongwe, in Malawi.
The informal sector, unequal pay for women and unpaid care work are some of the issues complicating calls for fair wages. Market in Lilongwe/Malawi, ILO/Martin Crozet, CC BY-NC-ND 2.0

According to Article 23 of the UN Declaration of Human Rights, “everyone who works has the right to just and favourable remuneration ensuring for [themselves] and [their] family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection”. The International Labour Organization (ILO), a UN agency, identifies the provision of an adequate living wage (i.e., a just and favourable remuneration for a person and their family that ensures their basic needs are met) as one of the conditions for universal and lasting peace based on social justice and has declared that a fair wage is a human right. This right is connected to SDG 8, which aims to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”.

Minimum wage and the working poor

In the aftermath of the global economic crisis of 2008, those who found new jobs were often earning less than they did before. Since then, various countries have reviewed their policies on wages, which means that 90% of the ILO’s  member states now have minimum wage policies, set through collective bargaining or through statutory intervention. Some countries, for example Germany and South Africa, that did not have minimum wage policies have introduced them, and the UK has introduced a National Living Wage (NLW) that applies to people over the age of 25. It should be noted that this NLW still falls short of what the Living Wage Foundation have called the real living wage. These measures of minimum wages and so-called living wages are a starting point for the right to an adequate living wage, but governments still need to do more to allow people access to a decent wage. Although the annual growth rate of the number of working poor on a global scale has decreased since 2001, even with minimum wage policies in place, the risk of in-work poverty in the EU, for example, has risen since the 2008 economic crisis. This means that the rate minimum wages are set at in many, if not most, countries need to be increased in order to be better aligned with current living costs. But as the ILO explains, setting and adjusting minimum wage levels is a complicated matter. If they are set too low, people will remain in poverty and not be paid fairly. If they are set too high, they will be poorly complied with and may have adverse employment effects.


Challenges with minimum wage policies

Another issue with minimum wage policies is that they continue to exclude many people. This is, in part, due to difficulties with the classification of workers. For example, women have been campaigning for decades against women’s unpaid and unrecognised labour. On top of this, the rise of the gig economy has blurred the line between employed and self-employed, where a growing number of self-employed people now have similar roles to employees but are paid an “income” and not a “wage”, leaving them unentitled to minimum wage.

The World Bank estimates that as many as 48 million freelancers worldwide find work through online platforms, often across national borders. This means that minimum wage policies that focus only on those who are employed in the more traditional sense of the word are quickly becoming outdated. It also means that there are difficulties that arise with nationally set minimum wages. Assessing and setting adequate living wages is a particularly challenging task when people are working across national borders because the cost of living between states can vary considerably. However, there are also vast differences in the cost of living within states. Therefore, more work needs to be done not only to increase minimum wage rates to bring workers closer to earning a living wage but also to create policies that reflect the current reality of a growing workforce that exists outside of the traditional definition of an employee.

And, of course, having access to enough money to meet one’s basic needs should also be a right of those who do not have access to work or cannot work. Patrick Belser, an ILO senior economist, describes a living wage as “a wage from full-time work that allows people to lead a decent life considered acceptable by society”. Those working full-time should, of course, be paid a wage at least adequate enough to allow them to lead a decent life considered acceptable by society. But because of the difficulties with classifying workers and because full-time work is precarious and difficult for many people to gain access to and to keep, it is important to consider whether a focus on the full-time nature of work should be central to the adequate living wage. People often move in and out of work, also full-time work, for numerous reasons. For example, women often miss out on full-time paid work with decent wages in order to do unpaid care work, especially childcare. Injuries, disabilities and health problems, including mental health problems can be a barrier to (continuous) full-time work. And an increasing culture of short-term contracts can make access to long-term full-time work very difficult. Therefore, governments must also concern themselves with the financial situation of those who are not labelled workers at any given point. This point has been emphasised during the COVID pandemic with so many people losing their jobs and their incomes suddenly.

Generating access to basic needs through several means

As Patrick Belser points out, achieving a living wage in all member states is a complicated matter. In poor countries, for example, enterprises do not have enough money to pay people a decent wage in line with a living wage. Belser suggests that policies that aid with economic growth and higher productivity are therefore useful to pursue. However, he also notes that because in-work poverty is still found in rich countries, economic growth should not be the only focus. Trade unions, for example, can also help people gain access to a fair wage through negotiation. Therefore, they should be strengthened but also reorganised so that they accord with the current globalised context many workers live in – for example, working across national borders.

It should also be pointed out that ensuring that people’s basic needs are met does not only have to be achieved through increasing wages. Other measures can be taken. For example, taxes on goods and services in certain sectors, such as VAT on food, could be decreased or abolished, as is the case for many foods in the UK; markets, such as the housing market, could be further regulated; and policies could be created that put more focus on redistributing wealth in ways unrelated to wages. Nonetheless, the campaign for the right to an adequate living wage remains a key part in ensuring that workers are paid a fair wage and is a step towards more people being able to provide themselves and their families with a decent life.

Teri Shardlow




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