In this draft Directive, living wage is mentioned explicitly as a human right. In particular, the draft Directive states companies are to ensure that “an adequate living wage” is not withheld, including in their supply chains. We, the signatories of this letter, very much welcome the inclusion of living wages in the EU Directive and call for the inclusion of living income as well.

Living wage and income are crucial for fighting poverty and inequality

Living wages and incomes are at the core of decent work and fair purchasing practices and embedded in the Universal Declaration of Human Rights (article 23 and 25) and ICESCR (article 7 and 11). The concepts of “living wage” and “living income” are both about achieving a decent standard of living for households. The idea of a living wage is applied in the context of hired workers (in factories, on farms, etc.), whereas living income is discussed in the context of any income earner, such as self-employed farmers.

The Global Living Wage Coalition defines a living wage as “the remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events.”

This is not a given for many people: the ILO estimates that 630 million workers - that’s nearly 1 in 5 workers globally - earn too little to lift themselves and their families out of extreme or moderate poverty. They are truly the working poor, who remain trapped in poverty. Living incomes are key to remediate poverty among vulnerable groups of self-employed such as smallholder farmers or artisanal miners. Living wage and income can help break the cycle of poverty, build healthy local economies and encourage equality in societies.

Living wage and income are good for business

More and more businesses recognize the business case for living wages and incomes is greater than the cost of inaction. They help retain a stable, skilled work force and a productive, resilient value chain. Companies committed to living wage and income are better positioned to respect human rights in their own operations and their supply chain, meeting the expectations of the EU Directive. A growing community of companies is committed to enabling living wage and income in their own operations and their supply chain. The signatories of this letter call on the Members of the European Parliament, European
Commission and the member states:

• To ensure living wage and income are included as a human right in the final Directive
• Not to compromise on the definitions of living wage and income. Keep the reference to ICESCR article 7. We urge not to follow the example of the German

Due Diligence law (Lieferkettengesetz), which redefined living wages as “legal minimum wages” - which are often not living wages. If there is a need for a further definition of living wages and income beyond ICESCR article 7, we recommend referring to the definitions of the Global Living Wage Coalition and the Living Income Community of Practice. 

The EU Directive has a unique potential to create a level playing field for companies to support living wages and incomes in their supply chains. By promoting living wage and incomes, the EU Directive on corporate sustainability due diligence has the potential to become a landmark legislation that strengthens company performance and profitability, while tackling poverty and inequality worldwide.

The time for living wages and incomes is now.