Living wage - what's not to like?

It is an ETI membership requirement that companies implement a living wage in their operations and their supply chains.  With Living Wage Week upon us (3 – 9 November), it may be a good time for companies to take stock on this important issue. 

For much of ETI’s existence it has not been obvious what a company should do to meet the Base Code edict that Living wages are paid, especially when many workers were not even paid the legally binding minimum wage (as may still be the case with informal workers). The last few years have seen a thousand flowers bloom.  Fair Labor Association, Fair Wear Foundation, Fairtrade International and Social Accountability International, amongst others, are all embarked on some stage of the living wage journey.  Pilot projects by ETI member companies have delivered significant (if modest) wage rises by raising productivity in garment factories. And a string of studies in diverse sectors point to the urgent need to raise wages, and often chart how the obstacles to raising wages can be navigated.

Living Wage Week focuses on UK workers, but the reasons for paying a living wage are the same the world over.  For the worker it means they can give their families a minimum standard of living. But all the pilots and studies I have seen (including for example work by M&S under Plan A and a recent report by War on Want have also found benefits for companies, including reduced absenteeism and staff turnover, retention of a skilled and motivated workforce, lower HR costs … and knowing that staff and their families can live free of poverty. What’s not to like? 

Living wage as an issue is not going to go away. Even David Cameron says it's “an idea whose time has come.” Savvy ETI members will want to be able to show that they are tackling living wage, at least in (a manageable) part of their operations. ETI and other initiatives provide opportunities which companies can slot into, to collaborate in implementing living wage, in product sectors as diverse as tea, garments and bananas. 

Or maybe start nearer to home? ETI member companies could take advantage of the Living Wage Foundation certification scheme to implement living wage with their own workforce, as hundreds of UK companies and organisations have done. It could be a good springboard for implementing living wage in company supply chains. Just think of the message this would give to your workforce, and to consumers alike.

Peter Williams is ETI NGO Co-ordinator and represents Homeworkers Worldwide in several ETI programmes and areas of work. The views above are expressed in a personal capacity.