New York, United States of America

The UN Global Compact looks forward to the ILO meeting of experts on wage policies, including living wages, and to the opportunity to speak at the event.

The UN Global Compact calls on companies worldwide to align their operations and strategies with our Ten Principles covering human rights, labour, environment and anti-corruption. With more than 20,000 participating companies, it is the world’s largest corporate sustainability initiative.

To advance social justice, we encourage companies to provide and promote a living wage as an essential aspect of decent work to ensure all workers, families and communities can live in dignity. A living wage is about the needs of workers and their families and is recognized as a human right in the Universal Declaration of Human Rights. It benefits fellow employees and businesses as well.

Last September, we launched the Forward Faster initiative, challenging businesses to publicly commit to ambitious targets linked to five issue areas identified to accelerate progress across all 17 SDGs. 

Companies that sign up to the living wage targets commit to paying a living wage in their own operations and to working with supply chain partners, contractors and key stakeholders on a joint action plan towards providing living wages and living incomes.

By signing up to these targets, companies are showing that they are eager to take action on living wages and to include their commitment in their business strategy.

As indicated in the report, like Forward Faster, there are several other initiatives working with companies on living wages, including in global value chains. Altogether, a substantive and growing number of companies are involved and taking action.

Building on this momentum, on behalf of the UN Global Compact and the organizations supporting the living wage targets – including the Sustainable Trade Initiative (IDH), Shift, the World Business Council for Sustainable Development, the B-Team, the Living Wage Foundation and AIM-Progress – we urge the ILO to use this meeting to:

1. Develop a standard definition of a living wage aligned with human rights standards, focused on the needs of workers and their dependents, and building on the work done by leading organizations. A clear distinction should be made between the definition, rooted in human rights principles, and its operationalization, which also considers economic factors;

2. Develop agreed criteria for methodologies for estimating evidence-based and transparent living wages, which could be used by social partners, including companies and trade unions, to estimate living wages. This can encourage standardization, harmonization and comparability of the different estimates currently available and should build on ongoing efforts and work;

3. Provide guidance to companies through a template for a living wage implementation roadmap, which will support supply chain partners in agreeing on joint action plans and overcoming various challenges that complicate the payment of a living wage, including the role of pricing and sustainable purchasing practices. 

Guidance on collaborative solutions, including between buyers and suppliers, is needed to aggregate buying power, further support meaningful social dialogue and collectively negotiated wages and sustain the conditions for continued improvement of wages across value chains.

We hope the ILO provides capacity building and technical assistance alongside the roadmap. As mentioned in the report, there is already existing work from partner organizations that can be built on and amplified throughout this process. 

It is important to acknowledge that all stakeholders involved, including buyers, suppliers, Governments and supporting organizations, have distinct responsibilities and specific roles to play. In many countries, when minimum wages are set, there is an imbalance between the consideration of economic factors and workers’ needs.  We need an enabling environment conducive to the achievement of living wages as a critical component of the wider decent work and just transition agendas, and we, therefore, seek the support of the three constituents of the ILO to act on it.

At the Global Compact, it has become increasingly evident that a coordinated effort and a clear path forward are essential to driving corporate action on living wages. Progress requires collective work to influence change at scale across entire industries and in different national contexts. 

Having authoritative guidance from the ILO on the definition, methodology and roadmap of living wages is key to enabling and incentivizing more companies to embrace living wages as integral to decent work and economic growth and signaling policymakers to adopt living wage policies.

This conversation goes beyond numbers and wages; it's about human rights, social justice and the sustainable future we aspire to create.

Joint statement delivered by UN Global Compact on behalf of the Sustainable Trade Initiative (IDH), Shift, the World Business Council for Sustainable Development, the Business Commission to Tackle Inequality (BCTI), the B-Team, the Living Wage Foundation, AIM-Progress and the UN Global Compact