© Suzanne Lee, courtesy of Max Havelaar Stiftung Schweiz / Fairtrade

Wages and workers’ rights

Summary of the issue:

Wages and workers’ rights

The challenges faced by wage workers around the globe can be daunting. Workers in factories, mines, agricultural operations, cotton gins, brick kilns, logging operations and other extractive industries often earn too little to cover their basic needs, are required to work in dangerous or unhealthy conditions, and are denied basic labour rights such as overtime pay and the right to organize. The statistics can also be daunting:

  • 25 million people in forced labour (not including forced marriage); and152 million children in labour according to the ILO’s 2017 report on modern slavery;
  • 21 million people go to bed hungry, and even more – one in three – suffer from some kind of malnutrition according to the World Food Programme’s latest statistics;
  • 10 percent of the world’s population lives in extreme poverty defined as earning less than USD 1.90 per day. The majority of the global poor live in rural areas and the majority of these are employed in the agricultural sector, according to 2015 World Bank statistics.

Sustainability standards, certifications and related supply chain tools have diverse strategies aimed at improving wages and workers’ rights. Most programmes require that workers be paid at least minimum wage, and in recent years the ‘living wage’ concept has emerged as a policy priority in many countries. According to the Global Living Wage Coalition, a living wage is sufficient remuneration to afford a decent standard of living for a worker and his or her family, permitting adequate access to food, water, housing, education, health care, transport, clothing, and preparation for unexpected events. A region’s living wage is calculated using a rigorous formula that takes that region’s specific costs and conditions into account. Where such benchmarks exist, many standards and certifications have begun to explicitly incorporate the living wage concept into their standard.

Standards and certifications also often include criteria focused on working hours and leave, non-discrimination, equal opportunity, alternatives to retrenchment (layoffs) and dismissal, severance and back pay in a timely manner.  They often also have provisions for grievance mechanisms for workers, including allowing for anonymous complaints to be raised and addressed.  Most have robust requirements around minimum age for work, monitoring for the detection of any child labourers, and developing procedures to monitor companies and their suppliers for forced labour or trafficked workers.  Some programmes build awareness in communities to increase understanding of the high risk of child labour in the main industries nearby and so that community members can support education so that children don’t work.  Some of these same programmes also adopt a ‘surprise inspection’ strategy to detect, remove and rehabilitate child labourers in industries where forced child labour (e.g. carpets in South Asia) is endemic.

Standards and certifications active in sectors that involve dangerous or hazardous working conditions or the application, use or disposal of chemicals usually put strict safety requirements in place to promote the health and safety of their workers and their workers’ families. Some of these requirements include medical check-ups for workers who conduct potentially hazardous activities; health and safety risk management plans; measures to protect workers exposed to physical, chemical or biological hazards; use of personal protective equipment; provision of first aid kits to workers; and various other training programmes, provisions, and accommodations for workers on health and safety.

The right to bargain collectively for compensation and other benefits is often enshrined in the standards of certification systems and related tools, as are requirements to cap overtime hours, require higher pay for overtime hours, and provide sick leave and maternity leave. In standards focused on larger-scale industries such as mining or building or factory work, standards systems often require adequate accident insurance, compensation for workplace related injuries, health and life insurance for workers; and safety controls and other protective measures.

Some resources that examine the impact of standards and certifications and other related on wages and workers’ rights are as follows:

Available evidence

Linked outcomes of interest

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