Kuva: Flickr Creative Commons/Hamed Masoumi

A report published by Finnwatch in February 2015 compares different methods for calculating a living wage. Based on the most developed methods, the report’s conclusions include a detailed model, which companies can use to calculate a living wage in developing countries.

“Although a living wage is a human right, companies continue to disregard this in their supply chains," Henri Telkki, Researcher and Legal Expert at Finnwatch, explains.

Many companies have justified the payment of low wages by stating that they abide by local laws and argue that there are no effective models for calculating a living wage.

“The purpose of our report is to put an end to claims that there are no models available,” Mr Telkki states.

According to Finnwatch, there are clear, human rights instrument-based criteria available on the basis of which companies can calculate a living wage for different industries and different regions.

A living wage is the take-home pay received by a worker for a standard work week sufficient to afford the worker and the worker's family adequate nutritious food, housing, clothing, healthcare, an education for the family’s children and other basic needs. A living wage also allows the worker to put aside modest savings and enables the whole family to participate in social and cultural activities.

The minimum wages prescribed by national laws are often not enough to cover basic living costs. Although the government of every country is responsible for guaranteeing that each worker receives a living wage, companies have a responsibility independent of any government to also respect human rights when they have activities abroad. Therefore, it is not enough for a company to pay a minimum wage, if that wage is not a living wage.

“Companies can contribute to insufficient wages either directly as employers or as business partners to factories that pay too low wages," Mr Telkki says.

The living wage has garnered a great deal of attention recently within the scope of discussion on corporate responsibility. A report published in February 2015 on Stora Enso’s human rights risks criticised the state-owned enterprise for contributing to the payment of insufficient wages. In its newest reports, Finnwatch has also discovered insufficient wages in book printing and palm oil production in high-risk countries.

Some companies have publicly committed to the payment of living wages, but in reality, they lack the concrete benchmark for the calculation and time-bound, efficent procedures required for increasing wages to the level of a living wage.

“We must make greater demands on the responsibility audits commonly used by companies, and a requirement for the payment of a living wage must be added to their criteria. The Finnish government must also see to it that companies are required to compile human rights risk assessments," Mr Telkki describes.

Further information:

Henri Telkki 
Researcher and Legal Expert Finnwatch ry
Finnwatch ry
+358 40 410 9710
henri.telkki (at) finnwatch.org  

The Finnwatch report “A living wage, a human right – A model for calculating a living wage and related recommendations” can be read here >>

The report was commissioned by the Trade Union Solidarity Centre of Finland SASK.

Tämä teos, jonka tekijä on Finnwatch, on lisensoitu Creative Commons Nimeä-EiKaupallinen-EiMuutoksia 4.0 Kansainvälinen -lisenssillä.