What is the business case for paying living wages, and how can businesses implement living wages across their value chains?

Ideas
41

@Francesca_New1 - one for you :slight_smile:

42

Hi all- Honore Johnson here from IDH. Absolutely agree with you Claire. We see responsible purchasing practices, and the alignment of company’s procurement and sustainability teams to be very beneficial for a successful Living Wage supply chain initiative.

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43

In terms of other examples there is a lot to learn from the multistakeholder Malawi 2020 Tea Revitalisation Programme that Fairtrade participated in to support a collective bargaining process that led to a more than 20% increase in wages for 40,000 tea workers in 2016.

Also the more recent Living Wage commitments made by retailers to support living wages for Banana workers - its been great to see the UK commitment alongside other LW commitments for banana workers in the Netherlands, Germany and Belgium too. Collaborative learning, investment and action is key!

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44

Welcome Honore

45

We do factor in the costs to produce the crops that are grown. As you say, this can vary across farm sizes and is dependent on the crops grown and the mix on a farm. It is important we consider the farm economics. Many of the programs in our supply chains incorporate access to finance and models to ensure more affordable inputs/services.

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46

Thanks Honore - I was just reflecting on the LW Banana commitments that IDH have helped bring about too - an exciting step forward.

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47

Totally agree on the need for greater collaboration and engagement between different actors in the supply chain. So crucial to ensure we consider the perspectives of all involved and avoid any unintended negative impacts of decisions.

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48

I so agree with this! Living wages really speak to the heart of the business model.

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49

Our third question to examine today:

50

Thanks Katie - To address systemic inequalities in global supply chains, collective sector-wide action is critical. As I mentioned earlier we also need everyone in the supply chain to play their part to make a living wage a reality for all workers. In addition it is critical that the sector opens the floor to farmers and includes their perspectives in the implementation of LW commitments being made by end-buyers. Fairtrade is committed to listening to and acting on farmers’ voices: we are continually exploring new ways to ensure their views are represented in supply chain discussions. Any Living wage interventions must be created with producers, rather than designed and done ‘to them’ without their feedback.

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51

A concerted effort, rather than individual company initiatives, is needed. An agreement between companies -working in specific supply chains- would foster better outcomes. Such a process would be transparent with a significant buy-in from the corporate sector.

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52

For us to make Living Wages a reality for all, across all supply chains and industries, we need to ensure that we all support and engage in collaborative initiatives that drive best practice approaches and standardization.

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53

A key barrier today to Living Wage adoption and implementation of a Living Wage commitment is the plethora of databases and differing benchmarks and methodologies. This creates a distraction from the goal and prevents the movement from spreading at speed. Similar to Science Based Targets for Net Zero commitments, we need the equivalent on Living Wages to truly scale the impact of this work and to ensure others can adopt and we can all communicate consistently with supply chain partners about the targets/benchmarks we are striving to reach.

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54

Anyone joining this conversation at any time, if you want to reply to or comment on any of the previous points or questions - please feel free. All your insights will be gathered together in the next day or so and summarised into a take away paper for you and you will be name checked in the paper. :slight_smile:

55

Social Dialogue, involving governments and civil society besides workers’ and employers’ organisations would also be quite meaningful

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56

Agree and also to advocate to and work with governments to support the regulation of living wages for workers into their own laws.

57

How can we work around this @Francesca_New1 - and others, please do chime in, I would love to know your suggestions.

58

@claire.hancock this is such important work that Fairtrade is contributing- ensuring that producers are engaged and co-creating solutions.

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59

As a founding member of the Global Living Wage Coalition, Fairtrade has also worked closely with founders of the Anker Methodology to develop living wage benchmarks that tell us where we need to get to. These are updated each year for inflation and available at www.globallivingwage.org

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60

Hi everyone, Annabel Beales Collaboration Lead for Business Fights Poverty here. Great to take part in this discussion!

The report that Business Fights Poverty published with Shift and Cambridge Insitute for Sustainability Leadership on The Business Case for Living Wages highlighted three ways that living wages are good for business, as well as people.

  1. Core business - as others have highlighted, positive for staff retention and loyalty, reducing absenteeism and sick leave, creating a positive reputation with customers and investors, and increasing productivity.

  2. The value chain - all the above, increasing supply chain performance plus creating more resilience to shocks

  3. The wider operating environment - in terms of creating markets in which more people can afford to buy products, and also supporting stable and healthy societies and lessening the systemic risk of inequality

The report is here: The Case for Living Wages - Business Fights Poverty

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