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DIEH Briefing Paper on Living Wage DRAFT Seminar 18.9.2009

DIEH Briefing Paper on Living Wage DRAFT Seminar 18.9.2009. Introduction. NGOs. Companies. Business associations. Trade unions. Multi-stakeholder initiative Purpose Promote ethical trade and responsible sourcing Platform for knowledge sharing Resource centre

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DIEH Briefing Paper on Living Wage DRAFT Seminar 18.9.2009

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  1. DIEH Briefing Paper onLivingWageDRAFTSeminar 18.9.2009

  2. Introduction NGOs Companies Business associations Trade unions • Multi-stakeholder initiative • Purpose • Promote ethical trade and responsible sourcing • Platform for knowledge sharing • Resource centre • Guidance to members on carrying out their responsibility in practice

  3. DIEH Briefing Paper Draft • A theoretical foundation for DIEH position paper and recommendations • Should encompass: • An updated overview of the issue • Practical cases • Lessons learned • Best practices

  4. DefinitionsLiving wage is commonly understood as a level of compensation that allows workers to meet basic needs including staple food, housing and health care and provides some discretionary income within a standard work week.

  5. Different Challenges • Governments: Fear that higher minimum wages have a negative effect on the economy and trade • Companies: Fear higher costs and poor competitiveness • Suppliers: Fear a rise in costs vs. falling retail prices • Trade unions: Mechanisms such as collective bargaining should be in place

  6. Company Challenges • How can smaller companies have any influence on the wage level as a small customer with the supplier? • How can companies ensure that the suppliers’ increased earnings will be transferred to the workers? • How can companies join forces with other buyers at the same facility when they do not know them? • What can companies do when their supplier fears raising salaries due to threats from neighbouring factories in a cluster?

  7. How to implement? • Multi-stakeholder collaboration: unless a company is the main customer, it cannot alone implement a living wage with the supplier (Miller & Williams, 2009) • Local input for estimating wage levels • Workers, trade unions, NGOs, academics etc. • Wage-ladder • Step 1: Fair wage? • Training of workers to promote collective bargaining • Companies should examine their own cost structure to identify how to cover the additional cost

  8. Discussion Points • Is the issue covered? • Business Cases? • Other…

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