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Anker methodology for estimating living wages published
Richard and Martha Anker recently published ‘Living Wages Around the World: Manual for Measurement’, which describes a new methodology to measure a decent but basic standard of living in different countries.
45 years… that’s how long Richard Anker jokingly estimates that he and his wife and collaborator Martha Anker have been working on developing their methodology for estimating living wage.
From field work in India to long careers at the International Labour Organization (ILO) and World Health Organization (WHO), Richard and Martha gradually built the foundations of the methodology presented in their new book, Living Wages Around the World: A Manual for Measurement, which was launched in New York earlier this month.
After retiring from the ILO, Richard initially thought he would need six weeks to develop a robust methodology for measuring living wages using secondary data. The more he dug into the challenge, the more he realised that secondary data alone would not produce meaningful measurements.
Working with businesses committed to paying a living wage
A request from Laurelton Diamonds, a subsidiary of Tiffany & Co, to help them calculate the living wage for a new factory in Vietnam provided the first opportunity to field test a different approach, combining the local collection of field data on food prices and housing costs, as well as post checks on non-food non-housing costs with national survey data.
The Ankers went on to calculate eight benchmarks for Tiffany, which was committed to paying a living wage in its workshops, and then agreed to test the approach in an agricultural context in partnership with Fairtrade International, SAI, and the other standard setting bodies of the Global Living Wage Coalition (GLWC). Each new case brought to light new challenges and added more depth to the methodology. The final manual includes a careful explanation of the Anker’s approach to measuring living wage and also the gap between prevailing wages and the living wage.
Credible, transparent benchmark helps galvanise action
The ‘Anker methodology’ (as it has widely come to be known) is the basis for the work of the GLWC, a collaboration of seven standard setting organisations working to improve wage levels in certified supply chains and beyond. To date, 29 living wage benchmark studies using this methodology, covering many countries around the world, have been finalised or are in development.
While still relatively new, the living wage benchmark reports have already started to make a mark. During the launch event, representatives of Laurelton Diamonds, Eileen Fisher, the World Banana Forum under the Food and Agriculture Organization of the United Nations (FAO), and Richard Anker and Martha Anker as representatives of the Wages Committee for the Malawi 2020 project, all presented their experience with the Anker methodology and living wage reports. Conveying how having a credible, transparent benchmark, produced by an objective third party, helps build understanding and galvanises action to improve wages.
Asked why an accurate, credible measure of living wage is so important, Steven J. Heaslip of Laurelton Diamonds explained: “Our goal is to pay a living wage so that our employees and their families can continue their development and contribute to the local community. We can only achieve that through an accurate measure of living wage.” He recounted how workers used to come to work at their Vietnam factory with rickety, rusty bicycles. Now workers arrive with scooters and helmets – a clear sign of progress made possible by better wages.
Credible benchmarks help supply chain actors focus on the challenges of implementation
Luna Lee from Eileen Fisher said her company values the Anker methodology benchmarks because it enables them to focus on the challenge of implementation of fair wages, rather than calculation. A credible independent estimate of living wage also forced her to confront the reality that the gap between living wage and actual wages varies across locations and might be much larger than she had previously assumed. Both Luna and Victor Prada of World Banana Forum highlighted some practical obstacles to payment of a living wage, such as price setting processes and lack of alignment across competitors. And Victor Prada expounded on the benefits of collaborative efforts to improving wages.
Having a credible benchmark helps supply chain actors focus on overcoming these types of obstacles, instead of wondering what a living wage might be. This was the central goal that the GLWC set out to achieve when the seven standard systems in the Coalition (some of whom are competitors in the certification space) came together.
While the standard systems that are members of the GLWC aspire to drive action on wages within corporate supply chains, Richard and Martha have even broader goals: they would like to see their improved approach to calculating the cost of basic needs (a first step in a living wage calculation) produce changes to minimum wages and poverty policies, ultimately raising wages and incomes for all. During the launch event, they recounted their experience with the Malawi Tea 2020 revitalization programme towards living wage, a multi-stakeholder effort supported by the Ethical Tea Partnership (ETP), Oxfam, Sustainable Trade Initiative (IDH), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, standard setting organizations, and many multinational corporations to address low wages in the tea sector: since the Anker’s Malawi benchmark was published, wages in the tea sector have risen faster than minimum wage. As Richard tells it, their benchmark helped ‘awaken a sleeping giant’ and drive commitment to wage increase within the Malawi 2020 Coalition.
The GLWC has released benchmark reports for Brazil, Ethiopia, Pakistan, Kenya, the Dominican Republic, Malawi, Bangladesh, India and South Africa. Additional benchmarks are underway or scheduled for release in India, Vietnam, Sri Lanka, Mexico, Costa Rica, Ecuador, Guatemala, Ghana, and China. To access all published reports and learn more about the GLWC please visit www.iseal.org/livingwage.
Sign up for updates as new benchmarks are released here.
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Related content
ISEAL Webinar: Update on the Global Living Wage Coalition
Eliminating modern slavery and human trafficking in supply chains
Towards a living wage in Vietnam: an interview
A new stage in the living wage debate: reflections on the Roundtable on Living Wage in the Agri-food Sector
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Living Wages Around the World
Manual for Measurement
Richard Anker, Senior Research Fellow, Political Economy Research Institute, University of Massachusetts, Amherst, formerly with the International Labour Organization and Martha Anker, Independent Researcher, formerly of the World Health Organization and the School of Public Health and Health Sciences, University of Massachusetts, Amherst, US
This manual describes a new methodology to measure a decent but basic standard of living in different countries and how much workers need to earn to afford this, making it possible for researchers to estimate comparable living wages around the world and determine gaps between living wages and prevailing wages, even in countries with limited secondary data.
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Extent: 392 pp
Hardback Price: $155.00 Web: $139.50
Publication Date: 2017
ISBN: 978 1 78643 145 5
Availability: In Stock
Paperback Price: $49.95 Web: $39.96
Publication Date: 2017
ISBN: 978 1 78643 147 9
Availability: In Stock
eISBN: 978 1 78643 146 2
Economics and FinanceDevelopment EconomicsLabour EconomicsPolitical EconomyRadical and Feminist Economics
Wages are the main determinant of living standards for the vast majority of workers and families around the world. This manual describes a new methodology to measure what constitutes a decent but basic standard of living and how much workers need to earn to afford this, making it possible for researchers to estimate comparable living wages around the world and determine gaps between living wages and prevailing wages.
The new, practical methodology in this manual draws on 10 years of research and experience to clearly explain each step in the estimation process, based on standards for a low-cost nutritious diet, healthy housing, and all other needs including decent health care and children’s education. It stresses transparency and the need for time- and place-specific living wage estimates, and is replete with examples from country studies that have put it to the test. The authors describe how living wages can be estimated in locations and countries where secondary data are limited and make new, practical recommendations on how to value in kind benefits as partial payment of a living wage.
An essential tool for global sustainability standards, researchers, NGOs, governments and international organizations interested in wages, estimating realistic poverty lines, formulating policies for reducing poverty and income inequality, and improving livelihoods and international trade agreements. This manual is also an excellent tool for companies, global sustainability standards, trade unions, NGOs, and public–private partnerships, and others concerned with corporate social responsibility and human resources.
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