Interview with Living Wage Expert Dr. Elizabeth Bennett

By Nancy Reyes Mullins

Dr. Bennett serves on the Academic Advisory Council to the United Nations Forum on Sustainability Standards and is internationally recognized for her expertise in topics such as fair trade, workers’ rights, income inequality, and globalized supply chains. She has extensively evaluated and published findings on the role voluntary sustainability standards (VSS) can play in helping companies certify their commitment to a living wage. Article One had the pleasure of having Dr. Bennett present a Living Wage Workshop to our team, after which she was kind enough to meet with me for this brief one-on-one interview. 

1. Why do you think payment of living wages has become a more significant issue for companies over the past 3 years?  

So much has changed! Today, there is a real sense that living wage transitions are not only possible but, in the coming years, expected.

Something I often hear now is the comparison “living wages are to social sustainability… what net zero was to environmentalism.” What people mean by this is: “net zero” carbon emissions gave companies a specific, quantifiable objective to aim for, and allowed them to track progress toward an environmental goal. The living wage seems to be on a similar path—it offers a quantifiable, comparable metric, but toward a social/economic goal. 

I also think that investors are paying more attention than ever before. Living wages are increasingly included in ESG (environmental-social-governance) assessments, and some investors are becoming active on the issue. Platform Living Wage Financials, for example, is an alliance of 24 financial institutions that reports leveraging a €7 trillion investment portfolio to influence corporate approaches to living wages. 

One factor driving this change is that transparent, credible living wage estimates are now much easier for companies to find—regardless of where in the world they do business. The Global Living Wage Coalition, which is known for its rigorous, thoroughly researched living wage estimates, now provides “reference values” based on a rapid assessment method, and this has expanded its global coverage significantly. Similarly, a few months ago the WageIndicator Foundation—a Dutch NGO renowned for wage data—made public (and free!) its massive database of living wage estimates for 165 countries. The ILO (International Labour Organization) has also provided leadership this year. In March, it issued a landmark statement affirming the importance of a living wage for sustainable development and setting guidelines for best practices in living wage estimation.  

These changes have really opened the gates for a living wage transition!

2. What do you see as some of the greatest benefits to companies moving forward with living wages?

This is a great question. Look, no one can show up and do their best work if they can’t meet their basic needs. People can’t think clearly and perform well when they are exhausted and unable to feed their families. Paying a living wage means investing in a workforce that is more stable, reliable, resilient, and rested.

Stunning preliminary findings (publication forthcoming here) from the Central European Labor Studies Institute affirms this point. Drawing on a survey of low-wage workers located globally, researchers found that employees who earned a living wage (whatever that is for their region) were significantly more likely to report being satisfied with their lives and able to meet their most critical needs than those who made even slightly less. It seems that living wages are a tipping point in workers’ lived experiences. 

For companies working in agriculture, another benefit of living wages—or living incomes in the case of smallholder farmers—may be more stable supply chains and less volatile prices. In many sectors and regions, farmers are experiencing extraordinary challenges related to climate change. Many are poorly positioned to weather the (often literal) storms because they lack savings or viable alternatives. In some communities, it makes sense to give up on farming or migrate in search of better opportunities. The combination of climate change, weather events, low wages, and migration have contributed to supply shortages and volatile prices. If you look at coffee and cocoa markets right now, you can see these trends unfolding.  

Finally, for some companies, a benefit of increasing wages is simply to grow markets and stimulate consumer demand. If people do not have what they need to navigate their daily lives, it seems unlikely that they will experiment with new products or try new brands. 

The Cambridge Institute for Sustainability Leadership published a report that details more of the benefits that living wages can generate for workers, businesses, and communities, which may be of interest to some readers.

3. How do leading companies approach a living wage? 

At this point, leading companies are making clear plans, public commitments, and credible claims.

Plans for a living wage transition, thus far, seem rather diverse, reflecting differences in supply chains, challenges, business plans, and priorities. Some firms start with direct employees—either beginning at headquarters and expanding to other domestic and overseas operations, or starting with the lowest wage workers in the poorest countries, where modest investments may result in living wages for a greater number of people. Other companies begin with supply chains, focusing on a sector, region, or tier of the value chain where living wages are either more easily accessible or may make the greatest difference. 

Today, excellent resources are available for planning: the IDH “Roadmap on Living Wages,” walks companies through the early stages of learning, information gathering, and strategizing; the Global Living Wage Affiliate Network provides verification services and living wage certification programs; and the Living Income Community of Practice translates the concept of living wages to better prices for smallholder farmers, whose incomes are tied to sales, not wages. 

A number of leading companies are attempting to normalize the transition to a living wage by sharing information about their own plans, challenges, and success stories. Last year, PwC, for example, published a report about its movement toward a living wage transition. And other companies are also publicly committing. For example, in 2021, Unilever announced its intention to ensure that everyone who directly provides goods and services to Unilever will earn at least a living wage or a living income by 2030. As of today, nearly one hundred Unilever partner companies have publicly committed to initiating a living wage transition. 

And finally—related to public commitments—leading companies are being careful to make claims that are detailed, specific, accurate, transparent, and credible. Last year, ISEAL—a membership organization for supply chain certifications like Fairtrade International and Forest Stewardship Council—published a framework that aims to guide the practice of making credible living wage claims.

4. Any final words of advice? 

To close, I think I would just say that the conversation about living wages has really moved beyond the “whether and why” and is now at the “when and how”—there has been a lot of momentum in the right direction, which is great to be able to say!