Fairtrade and Living Wages for workers
Fairtrade’s ambition is that workers have the power to improve their own livelihoods and negotiate their wages and terms of work. That’s why living wages is a fundamental aspect of our strategy.
Workers at farms, factories and plantations are among the most vulnerable people in global trade. Without access to land or unable to make a living from it, they often have few options for a sustainable livelihood. These workers often lack formal contracts, freedom of association, basic health and safety assurances, and adequate wages, among other challenges. And often do not earn a living wage.
What is a living wage? It is a wage that covers the basic needs of workers and their families, including food, clothing, shelter, healthcare, education, transport to work and a little extra for unforeseen circumstances.
At Fairtrade we work to address this gap, going beyond our standards.
The Anker Methodology:
To determine living wages, Fairtrade utilizes the Anker Methodology. This approach calculates wages based on regional living costs and takes into account essential goods and services required to maintain a decent standard of living. The Anker Methodology ensures precise and context-specific wage benchmarks, allowing workers to afford necessities like food, housing, education, healthcare, transportation, clothing and savings for unforeseen circumstances.
Fairtrade's approach to achieving Living Wages
-
Fair Pricing
-
Value Addition
-
Efficiency and Productivity
-
Market Access
-
Community Development
-
Advocacy and Policy Change
-
Collaboration
-
Consumer Awareness
The Anker Methodology:
To determine living wages, Fairtrade utilises the Anker Methodology. This approach calculates local costs of maintaining a decent but basic standard of living and takes into account essential needs of workers and their families. The Anker Methodology ensures precise and context-specific wage benchmarks, allowing workers to afford necessities like food, housing, education, healthcare, transportation, clothing and savings for unforeseen circumstances.
Fairtrade's approach to achieving Living Wages:
Fairtrade's strategy to attain living wages focuses on workers and involves:
Fair Pricing: Fairtrade sets minimum prices for select Fairtrade products, that are based on costs of sustainable production, including the costs of wage improvement.
Value Addition: Encouraging producers to add value to their products, such as processing raw materials, increases profit margins, contributing to higher wages for workers.
Social dialogue: Promoting social dialogue particularly collective bargaining as an essential mechanism to improve wages. Collective bargaining is generally regulated by law and offers legal entitlements to workers.
Standard setting: Including robust standards for wage setting and wage improvement.
Efficiency and Productivity: Fairtrade supports efficient production methods through training, technology, and best practices, enabling workers to enhance their productivity and income.
Market Access: Fairtrade connects producers to global markets, expanding sales opportunities and increasing incomes for workers.
Community Development: A portion of Fairtrade premiums funds community projects, such as education and healthcare and improving the well-being of workers and their families.
Advocacy and Policy Change: Fairtrade advocates for fair trade policies and practices at local and international levels, including recognition of a Living Wage as a human right.
Collaboration: Fairtrade is a founding member of the Global Living Wage Coalition, partners with IDH - the Sustainable Trade Initiative, participates in the World Banana Forum and collaborates with other initiatives to unite stakeholders and address systemic issues related to fair compensation for workers.
Consumer Awareness: Educating consumers about the importance of fair wages and ethically sourced products drives demand for fair trade items and supports the cause of fair compensation for workers.
Choosing Fairtrade means supporting workers’ rights to a decent income, and putting more money directly in the hands of workers themselves.