UN Global Compact Launches Living Wage Analysis Tool
The UN Global Compact, the world’s largest corporate sustainability initiative, today launched a new Living Wage Analysis Tool (“the Tool”) to help companies identify actions and further opportunities to provide a living wage to ensure all workers, families, and communities can live in dignity.
Through showcasing good practices for ensuring a living wage in business operations and supply chain methods and leveraging resources for continuous improvement, the Tool can help businesses advance the living wage economy by making concrete commitments to assume their responsibilities and deploy their influence within value chains.
Working poverty caused by low wages is a global issue prevalent in many industries. According to the International Labor Organization (ILO), almost one in five workers worldwide did not earn enough to lift themselves and their families out of extreme or moderate poverty in 2019. Economic inequalities often cause low wages, threatening poverty reduction and hindering the fight against gender discrimination.
Commenting on the release of the new tool, Sanda Ojiambo, CEO and Executive Director of the UN Global Compact, said:
“As the private sector employs two-thirds of the world’s wage-earning population, it has the ability to contribute significantly to global poverty reduction and inequality through the provision of living wages as an essential aspect of decent work. Using the Living Wage Analysis Tool to ensure a living wage for all workers benefits core operations, value chains ,and the wider operating environment, enabling businesses to meet their human rights commitments better. While ensuring payment of living wages is often seen as a cost, it can offer many benefits to businesses and should be seen as an investment.”
The push for a living wage is in response to the fact that legally-set minimum wages often fail to meet workers’ needs. By going beyond legal compliance, businesses can ensure that all their employees have the income to support their needs and those of their dependents, raising standards of health and well-being.
A living wage is an essential component of decent work, and a cornerstone of development, contributing directly to several of the Sustainable Development Goals (SDGs), including Goal1: No Poverty and Goal 8: Decent Work and Economic Growth, as well as Goal 5: Gender Equality and Goal10: Reduced Inequalities.
The Tool was developed through the UN Global Compact Think Lab on Living Wage with companies and organizations leading on the topic and questions based on real-life company practice, international standards, and indicators.
As the world crosses the halfway point for achieving the Sustainable Development Goals by 2030, the UN Global Compact is challenging businesses to raise their ambition levels by taking tangible, accountable actions with the private sector well positioned to advance action on the living wage to meet the 2030 Agenda.