Interview with Roger McElrath, Living Wage Expert and NewForesight Board Member

By Jesse Nishinaga

Roger McElrath has spent decades advising companies on sustainability and human rights policies and programs. Among his many roles, Roger has been a leading voice and practitioner on the issue of living wages for direct employees. Roger has worked closely with companies across industries to implement living wage programs, which has included providing guidance to companies on how to carry out wage assessments and adjustments and helping them determine which categories of workers to include (and not include) in their living wage programs. Throughout this time, Roger worked at BSR and served in various research and teaching roles at top universities, including the Wharton School at University of Pennsylvania and UC Berkeley’s Haas School of Business.

Today, Roger continues to advocate for corporate living wage commitments and programs and advises companies and organizations on making the business case and applying a step-change approach to advancing progress on living wages. Roger is on the board of NewForesight, a Netherlands-based organization with a focus on implementing living wage strategies.

I had the great fortune many years ago to work with Roger on living wages. This past month, I sat down with Roger for a brief one-on-one interview to reflect on his past work and discuss where he sees the biggest opportunities for our field.

Back in 2008 when I first met you, there were probably only a handful of “pioneers” working on the issue of living wages—and you were one of them. A lot has changed since then. Or has it?

Yes, it has changed. The sheer number of companies across many industries working on living wages—and human rights more broadly—is so much greater today than it was prior to 2011, when the UNGPs first came out. Implementing living wage programs, conducting human rights risk and impact assessments, and taking concrete steps to mitigate negative human rights impacts, especially in one’s own operations, has become more mainstream, in part, because of the increased expectations of external stakeholders, international organizations, and governments in various jurisdictions.

There are also so many more companies today with human rights teams and in-house experts. While there’s a lot more work to do, all these things give me a big feeling of success, and I remain excited about the work that continues to be done by companies and consulting organizations like Article One.

What’s next on the corporate living wage agenda? As we look towards 2030, what do you see as the biggest opportunities for our field?

First, extending living wages to supply chains is one of the biggest challenges and opportunities. The challenge, of course, is getting suppliers to make progress on sustainability, particularly in these times of economic uncertainty. That’s why I think greater effort should be made to advance the business case for living wages in supply chains—and for consulting organizations to work with companies to extend their living wage programs to suppliers, given the extreme need for engagement and training for suppliers on this issue.

In my work, I try to remind companies that making progress on living wages does not have to happen overnight. Companies can and should take a phased approach in order not to harm workers and communities through layoffs or plant closures. Start small and work to expand the scope of your living wage program to more employees, contractors, and supply chains. For example, start with a more manageable supply chain, such as your third-party logistics supply chain, before expanding to other categories. Implementing a living wage program, especially in the supply chain, is a journey. Take the time to do this right.

Another important opportunity is standardizing and consolidating living wage benchmarks. There are key groups in our field currently working to establish living wage benchmarks for all countries that we can agree on and access freely. Recognizing there will be bumps along the way and perfection will not be achieved in the beginning, we should follow these efforts closely and support them in trying to make this happen for all of us.

Last, but not least, we need to continue to make—and share widely—the business case for implementing a living wage program. Increased costs for companies certainly can occur through the internal implementation of living wage programs with suppliers, payments to consultancies involved in running these programs, and, potentially, increased payments to suppliers.

But I’ve seen strong evidence—particularly, from companies implementing living wage programs for their direct employees—that these increased costs are short term and will be balanced out by the longer-term, positive impacts on suppliers’ workforces, including improved production quality and reliability, employee trust and satisfaction, less turnover, and higher success in recruiting new workers. Another benefit of implementing living wages that some companies have experienced is the ability to conduct detailed pay equity analysis as part of implementing their living wage program. Let’s continue to capture the data on this and demonstrate how implementing a living wage program can lead to positive ROI.

What advice would you give to the next generation of business and human rights practitioners?

Continue to find ways to work directly with companies on these issues. As I alluded to earlier, this is one the most significant changes I’ve seen over the past two to three decades. In the past, one had to advocate for change from outside the four walls of a company. Today, one can advance change from inside the company, which I think is very positive.

On a personal level, I have always enjoyed teaching and helping students. If you have a chance to talk to students about your work, I encourage anyone to try this out. It could be with students at a local high school, college, or university. One of the most fulfilling things I’ve experienced in my career is hearing from a past student of mine that a class or lecture they heard on business and human rights had changed their views. Supporting students also benefits our field. The more people in society who know about business and human rights—whether or not they work directly in this field—the better off our world will be.