What is a minimum to live: ILO context and instruments

By Bart Verstraeten, WSM Political Secretary

Since the 19th century, the idea that labour is not a mere commodity that can be owned, traded or exploited like any other raw material, has gained ground. This basically means that labour has to be rewarded, that workers had to be remunerated for their hard work. The most common way of doing so is by paying them a wage.

Most prominently, this idea was incorporated in the ILO Constitution which entrusts the ILO to promote “policies  in  regard  to  wages  and  earnings [….] to ensure a just share of the fruits of progress to all, and a minimum living wage to all employed and in need of such protection”.

Over the years, the ILO developed several international labour standards on this topic. The standards offering the broadest protection in that regard are Convention 131 (C131) and Recommendation 135 on minimum wage fixing, adopted in 1970. Key features of these 2 standards are:

• Governments are required to put in place and maintain specific machinery to fix minimum wages and to adjust them periodically.
• Representative organisations of workers and employers have to be involved in this minimum wage fixing machinery.
• Minimum wages have the force of law.

While the existing ILO instruments do not define a minimum wage, C131 lists for the first time explicitly 2 elements that should be taken into consideration in determining the level of minimum wages:

• The needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits and the relative living standards of other social groups;
• Economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.

Now here is the tricky bit. Even though the underlying objective of these ILO standards is to fix minimum wages at such levels that they allow workers and their families to lead a decent life, there is actually no guarantee that the minimum wages established in the various countries of the world meet this very condition. For this reason, trade unions, social movements and labour rights NGO’s have started campaigning for living wages or minimum living wages. By adding the qualification “living”, we make it clear to everyone that wages need to enable workers and their families to lead a decent life. Living wages refer not only to the subsistence needs of workers and their families, such as food, clothing and housing but also to their social and cultural needs, such as education and leisure.

If the idea of a living wage seems plain and simple, it has not yet been enshrined in a legal instrument. The Workers group tried hard while negotiating the new ILO Recommendation 204 on Transitioning from the Informal to the Formal Economy in 2014 and 2015. But the Employers Group finally retracted on a hard fought compromise. For them the living wage is a theoretical concept (and not a legal one) and there are no criteria to calculate it.

Well, WSM and its network of partner organisations do not agree with this line of thinking and here is why. First of all, many women in the Asian garment industry have testified that their minimum wage does not allow them to feed and clothe their families properly and pay the rent for the house. Mass fainting have occurred regularly in garment factories in Cambodia for this very reason. This is not just theory, this is the sad reality for so many working women around the world. Secondly, the concept of living wages (or minimum living wages) is incorporated in the ILO Constitution, the ILO Declaration of Philadelphia of 1944 and most recently in the ILO Declaration on Social Justice for a Fair Globalization of 2008.  These are legal texts, defining the constitutional mandate of the ILO as well as adapting it to changing circumstances over the last (nearly) 100 years. Thirdly, the elements listed in C131 and R135 can hardly be considered to be so concrete and precise so as to allow a mathematical calculation. In fact, governments and social partners are given quite a lot of discretion on how to determine the needs of workers and their families and the economic factors. This discretion can be used to set minimum wages or to set minimum living wages which allow workers and their families to lead a decent life.

WSM, ACV-CSC and their partner organisations want to move forward with this crucial issue in the years to come. First of all, we want to undertake some further research to get a better understanding of the different concepts and calculation methods in this field. In this regard, we want to know to what extent the consumption basket can be used to really define the cost of living of workers and their families. In principle, countries all around the world undertake household surveys and economic studies to calculate the cost of a basic set of goods and services for people in the national context. When you have an idea of the cost of this consumption basket, you also have the empirical data to make more precise calculations of living wages. Secondly, in our network we can also draw on the wealth of experiences of the different organisations (trade unions, social movements, labour rights NGO’s etc.) that have developed different approaches over the last decades. We are determined to learn from these approaches. Thirdly, we will determine our advocacy strategy based on further research and intelligence sharing. This strategy will target both companies and governments. Companies can no longer ignore their responsibility for the working and living conditions in their global supply chains. We want them to get involved, together with their supplies, in negotiating legally binding agreements that ensure living wages for workers. Governments will have to be convinced to adopt and implement minimum living wage fixing machinery. In that sense, it would be great if we could push the ILO to revise C131 and R135 to incorporate the word “living” throughout the text, while clearly spelling out that minimum living wages should enable worker and their families to lead a decent life. Another option is of course to lobby for an entirely new ILO labour standard. 

Whichever option is taken, we need a solid legal basis at international level, which we can then use to lobby governments to adopt new or adapt existing legislation.