Why is a global living wage necessary and sound?

As outlined in this blog post, there is a need for a multi-level, transnational labour law to ensure a living wage for all because work today occurs in global supply chains where workers and capital cross borders, whereas labour laws do not. The global living wage strategy proposed in my 2019 book is based upon extensive empirical research and regulatory theory and is more ambitious than previous real-life experiments and academic propositions. There are a number of reasons it should work to reduce poverty, inequality and informality – all of which are further outlined below.

First, it is based on a normative principle that is difficult to argue with: that all people should receive a living wage for their toil. The proposed global living wage, based on a new international living wage, is aimed at achieving the goal that all workers, regardless of where they live or under what legal arrangements they work, receive a living wage. The right to a living wage belongs to everyone by virtue of being human. This is the proposal’s starting point, and it is based on the recognition that the biggest single problem facing millions of people living in working poverty worldwide is that they do not earn enough to piece together a living wage, thus constantly facing the risk of not being able to cover the cost of basic needs, such as food and decent shelter.

Second, the proposal provides incremental steps towards a living wage because development does not happen overnight. It recognises that development is hard and slow and allows poor countries to reach the goal over a number of years. The key point of the strategy is that they must work towards it. Currently, ILO Conventions do not provide for incremental advances in the achievement of decent work in this way.  Ideally, it would help to address the short-termism of political cycles, and focus nations efforts towards what is arguably the most important goal all – the elimination of poverty.

Third, unlike real life experiments or academic proposals for the re-regulation of work, the proposed strategy champions a multi-level, transnational regulatory system, just as the dynamics that place downwards pressure on working condition are often transnational.  Current labour laws are national in scope, but the exploitative labour conditions informal workers often find themselves in are difficult to remedy at a national level because today’s workforce generally is a part of complex, international supply chains. The buyers at the top of the chain who strike tough deals for garments and electrical goods are based outside the country of production. In order to deal with this issue, the strategy canvassed in my book creates a transnational tribunal system, similar to that seen in the governance of international trade. It also gives national tribunals extra-territorial powers. Importantly, also, it proposes a system of coordination between these different levels.

Fourth, it creates incentives for all parties to be more active in the system of compliance and enforcement. For many years, few workers’ representative groups took an interest in the situation of informal and precarious workers. Trade unions in most countries around the world were concerned with their members - workers inside factories and traditional workplaces. In the strategy canvassed in my book, workers representatives can gain a share of damages, thus providing a means to fund further organising of precarious workers. States are made liable for unpaid Living Wages at the international tribunal, but can recover these by pursuing wrong-doers in national tribunals. This should act as an incentive for states to be more active in conducting inspections and collecting evidence regarding the conditions of informal workers.

Finally, the strategy provides for the fair attribution of responsibility. Once we have agreed that labour rights are human rights, regardless of the legal classification of the working relationship, the next question is who is responsible for these rights. The proposed campaign allows contractual parties to be joined to a claim who have in some way impaired the provision of a living wage, legal remuneration or related conditions to the worker. This might be an international buyer, a financer or some other contractual party depending on the arrangements in each individual case. Perhaps the biggest problem with a labour law system based on the contract of employment is that it grants powerful players in supply chains impunity against responsibility for worker conditions. The strategy not only allows for claims to be brought against such parties, it also allows tribunals to create positive duties for these parties in the form of collective agreements, industry codes and so on. 

The strategy proposed in my book is unlikely to be the perfect answer to poverty, inequality and informality.  Nor is it likely to be the strategy that is enacted due to political dynamics and path dependency which I further explore in my book. Nonetheless, I hope that this proposal provides the basis for discussion of the re-regulation of work on a far larger, transnational scale than has previously been the case.

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