Note: Webinar on Social dialogue and living wages (22nd January)

 

January 2025

The setting of living wages requires reaching a balance between the needs of workers and economic factors. Almost a year ago, tripartite partners at the International Labour Organization (ILO) reached an historic agreement on the concept of living wages. In parallel, many initiatives have emerged in recent years around the world for the promotion of living wages. Social dialogue plays a key role in setting living wages, thereby advancing social justice and reducing poverty and inequality.

It is in this context that the Global Deal organised a webinar on ‘Social dialogue for the promotion of living wages’ on 22 January. Laying the ground for the discussion, the ILO and ITUC explained what a living wage is, and which principles should be followed when setting them, based on the recent ILO guidance from 2024. Through consultation with social partners, be it through wage-setting institutions or collective bargaining, an incremental progression from minimum wages to living wages should be achieved. The discussion then centred on the difference between minimum and living wages, the importance of social dialogue at the local level to set living wages that allow for a decent standard of living, and remaining challenges on the ground.

Global Deal partners shared their recent experiences promoting living wages. Michelin explained the process of establishing living wages for its employees through benchmarks – a process that took around four years and that was made possible thanks to strong support from Michelin leadership. Banana Link underlined how with the support of retailers, they are in the process of supporting the conclusion of a collective bargaining agreement promoting living wages in the banana industry in Côte d’Ivoire. ACT (Action, Collaboration, Transformation) showed how they have facilitated the first of their kind legally-binding brand agreements in support of collectively bargained wages in the Cambodian garment and textile sector. 

• Patrick Belser, Senior Economist at the ILO, underlined that when establishing living wages, estimations should be based on certain principles, including consultation of employers’ and workers’ representatives and transparency regarding data sources. Social dialogue is also a crucial mechanism to operationalise living wages; it can take various forms and there is no one-size-fits-all approach.

• Daniel Kostzer, Chief Economist at the ITUC, highlighted how trade unions around the globe are addressing challenges on the ground for the analysis, based on empirical evidence at the national level, of the needs of workers and their families, and promoting an incremental increase from minimum to living wages, in cases where they are lower than the latter, to fulfil the mandate adopted by the ILO after the experts meeting.

• Talita Moreira, Group Compensation Expert at Michelin, explained how Michelin determined living wages, ensuring that employees can provide for their family’s essential needs while also providing for unexpected events and buying consumer goods. 

• Alistair Smith, International Coordinator and Executive Director of Banana Link, showed that the process of bringing social partners to the same table, establishing working groups and negotiating a collective agreement can take several years as was the case in Côte d’Ivoire. Local ownership is key in this regard, next to raising workers’ voices through a unified trade union movement and wage data verification through local research entities.

• David Cichon, Head of Programmes at ACT (Action, Collaboration, Transformation), described the ground-breaking process to bring together employers, unions and brands in Cambodia to develop a blueprint to transform the garment industry’s approaches to wages and wage setting based on legally-binding agreements.

The Global Deal’s Note on the Role of social dialogue in promoting living wages based on the Global Deal focus group in 2022-23, will be updated soon to include the latest developments.

In case you missed the webinar, you can watch the replay here.