‘Living wage’ crucial for workers and companies in post-pandemic world, expert panel suggested

Oxfam International and the CSO Coalition for Ethical and Sustainable Seafood hosted an online panel discussion - 'Battling Inequality in Food Supply Chains: a post-pandemic talk on living wage'. Representatives from civil societies and leading global companies joined the event to discuss how a living wage is crucial to close the inequality gap for workers, especially in food supply chains. 

Covid-19 made it worse 

Suthasinee Keawleklai, National Coordinator of Migrant Workers Rights Network (MWRN) works directly with migrant workers in Thailand. She revealed that the low wage crisis persisted long before Covid-19, with the current minimum wage frozen for several years, despite the cost of living increasing annually.

“For example, many seafood factory workers in Thailand only earn a daily rate, so they get paid a maximum of around 26 days in a month, but in reality they don’t eat 26 days a month, they eat 30 days a month. We need a fair wage for them to survive.” 
 

The pandemic made these workers even more vulnerable. Many workers were laid off, suspended from work without getting paid, and forced to cram in small rented rooms to reduce the rent cost which increased the risk of Covid-19 transmission. Workers who got infected with Covid-19 also received inadequate support from their employers.

John Samuel, Regional Director of Oxfam in Asia, echoed the situation and shared that at the global scale, the inequality gap has now reached a shocking proportion because of the pandemic, with women and young workers being hardest hit.

“While the CEO and the big promoters have huge profits and huge bonuses, the workers who are working in the food industry hardly get any money to meet their ends.” Mr. Samuel emphasized that the current system is unjust and exploitative and urged that now is the appropriate time for companies to start working towards a living wage.

More than a minimum wage

Cara Flowers, Senior Food Farming & Fisheries Advisor, Ethical Trade Initiative (ETI), clarified that a living wage is more than minimum wage. Having enough just to survive is not a living wage. A living wage allows workers to be able to afford a decent and dignified life with adequate access to food, health, education, housing, and fair employment.

It's totally unacceptable that those who supply our food and those who bring it to us are those who are suffering the most in terms of food insecurity, poor nutrition and overall poverty. We don’t tend to stipulate what a living wage is, but it is more than minimum wage, and often discussion can come down to what the bare minimum is to provide to survive. We’re not just talking about survival, but about thriving.

Collective benefits for all 

Chok Kittipongtavorn, Vice President of Compensation & Benefit and Performance Management from Charoen Pokphand Foods (CPF), revealed that CPF has committed to pay all workers a living wage by 2023. He believed that providing a living wage to workers would in turn benefit the company as well in terms of reducing turnover rate and recruitment cost. 

Rachel Cowburn-Walden, Global Director for Human Rights at Unilever, one of the first leading global companies to pay a living wage to all its workers, shared that the company expanded its living wage commitment from direct employees to everyone who directly provides goods and services to Unilever by 2030.

“There's a real advantage for businesses for workers to earn a decent wage. Economies cannot survive if income is not fairly distributed and if people are not earning enough, then they simply don't have enough money to put back into the economy”

Challenges to overcome

Despite some progress and commitments from the private sector, the panelists agreed that making living wage a reality remains challenging. One of the key barriers is the lack of comprehensive data which is prerequisite to create a clear and credible benchmark for determining a proper living wage in different industries and markets.

Suggestions to overcome these challenges were made, including that companies should strongly engage with their workers to collect information, gain a better understanding and build their own pathway to achieving a living wage with clear targets. 

For CPF, living wage is a journey which needs time and understanding. It has to be taken step by step, allowing time for adaptation and buy-ins. One of its first steps is to develop a living wage benchmark based on the current legally required minimum wage, then taking into consideration the business’ affordability in order to identify the top up.

Ms. Flowers said “we have a lot of companies with policies at the moment, but let's put in some time-bound targets and measure ourselves. That means having credible benchmarking, being clear about the methodology and including workers and their unions or representatives in this journey.”

Ms. Keawleklai stressed that it is a positive development that more and more companies commit to provide a living wage especially in countries that do not have a living wage benchmark, including Thailand. She suggested that companies should work with civil society groups and workers in creating the proper benchmark that is fair for all.

“On the other hand, creating a living wage benchmark without credible methodology, transparency and workers’ participation could end up meaningless.”

By Oxfam International and the CSO Coalition