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ILO agreement takes important step for living wages

21 March, 2024On 13 March, the International Labour Organization (ILO) reached an agreement on the living wage issue. The agreement, reached during a meeting of experts on wage policies, including living wages last month, was endorsed by the ILO’s Governing Body, last week. 

A week long meeting of tripartite constiuents of the ILO, namely workers, employers and government led to a series of recommendations regarding the issue of living wage.

This document brings clarity to the concept of what a living wage is: it is a 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 and to be achieved through the wage-setting process in line with ILO principles on wage-setting.

According to the agreement wage-setting practices should be based on the following institutions and principles: collective bargaining and tripartite social dialogue, considering the needs of workers, their families and the economic factors, wage policies and wage-setting mechanisms should promote gender equality, equity and non-discrimination, utilize powerful data and statistics for an evidence-based approach, which means designing and implementing adequate policies which require representative data and timely and reliable statistics and data analysis, which is often not available in many countries.

This document stipulates the methodologies to be used to estimate living wages such as estimating the needs of workers and their families through practical methods, consulting with employers’ and workers’ organizations on living wage estimates and involving social partners and regular adjustments to consider changes in the cost of living and the patterns of consumption.

Going forward the experts recommend that there should be awareness raising on living wages through guidance and information, engaging with living wage initiatives to promote alignment with the ILO living wage principles and conduct further research on living wage trends and developments by sharing knowledge and experiences. 

IndustriALL general secretary, Atle Høie, says:

“We welcome this agreement. The gap between rich and poor is becoming wider each year and this agreement sets out proper guidelines on how we can close that gap and ensure that all workers are brought out of poverty and able to take care of themselves and their families.It is very important that the constituents recognize the importance of collective bargaining in the process of reaching national agreements on the definition of a living wage and that a living wage is recognized as a human right.”

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