ILO has defined the concept of a living wage

The Building and Wood Workers International (BWI) welcomes that the parties of the International Labour Organization (ILO) have agreed on the definition of a living wage, how to estimate it in a local context, and steps to operationalise living wages through our supply chains. BWI is proud to have been a part of the workers’ expert group that negotiated the conclusions of the Meeting of Experts on wage policies in February. The agreement reached, now ratified by the ILO’s Governing Body on 13 March, represents a significant advancement towards a wage level that is necessary to afford a decent standard of living for workers and their families. The adopted document highlights that decent wages are central to economic and social development and to advance social justice. While also playing an essential role in reducing poverty and inequality and ensuring a decent and dignified life.

The ILO living wage is now clarified to be:

• “the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country circumstances and calculated for the work performed during the normal hours of work;
• calculated in accordance with the ILO’s principles of estimating the living wage;
• to be achieved through the wage-setting process in line with ILO principles on wage setting.”

The agreement states that the estimation of living wages should follow several principles, including the use of evidence-based methodologies and robust data, consultations with workers’ and employers’ organisations, transparency, public availability, and consideration of regional and local contexts and socio-economic and cultural realities.

Looking forward, BWI commits to collaborate closely with the ILO, governmental bodies, employers’ associations, and other relevant stakeholders in operationalising living wages throughout the supply chains in BWI sectors. This will include strengthening social dialogue and collective bargaining, promoting a progression from minimum wages to living wages, while ensuring national and/or local ownership, gender equality and non-discrimination.