Moving from a living wage to a dignity wage

A great deal of the worldwide advocacy around wages focuses on either increasing the minimum wage or pushing for a living wage.  These foci rest primarily on economic considerations as to how much a worker needs to meet her/his basic expenses.  Labour advocates will argue that the minimum wage is not sufficient to support a worker's family. This is true whether the worker is in the United States or Bangladesh. Living wage movements respond to this critique by arguing for a wage that is based on current economic considerations to meet basic expenses such as housing and food. Employers generally oppose increasing the minimum wage because it increases labour costs, and makes them less competitive in the market.

There is no question that living wage advocacy is an improvement from seeking only minimum wage.  We should continue to push for living wage laws. Where living wage advocacy falls short is in asking is there a wage that allows workers to live in dignity, not a wage by which they can simply meet their basic expenses? Dignity wage reframes the wage debate to a human rights issue whereas living wage remains tethered and subject to economic rationale. It may be that the actual wage is the same, but the way in how the wage issue is framed makes a difference in how labour is respected. This reframing also requires employers and businesses to rethink their relationships with their employees.

Recently, while conducting interviews with garment workers in Bangladesh, I asked them how much wage they would need to meet their expenses. They mentioned a monthly rate from Tk. 7,000 to Tk. 9,000 (roughly $100). This is still lower than the $177 demanded by Cambodian activists. The minimum wage in Bangladesh, which increased in 2013, is Tk. 5,300 taka. When I asked what amount they would need to live in dignity, the answer ranged from Tk. 8,000 to Tk. 12,000.  The higher amounts were from workers who had children or financially supported elderly parents. In response to my question, cynics said that workers would demand an astronomical amount. Unsurprisingly, their demands were modest. There were near overlaps in some cases between living and a dignity wage, in particular among younger workers without children. In the context of the export oriented industry, living or dignity wage may need to be shouldered by buyers by paying more as cost price.

When asked what they thought a dignity wage meant to them, one husband said it was not only to meet housing expenses, but also to buy healthy and nutritious food, to have money for their children's education, and to experience simple joys, such as buying his wife lipstick. These do not seem like unreasonable demands.

It may seem difficult to move towards a framing of wages around dignity because of some notion that it is an unquantifiable concept; but that is not the case.  They have legislated a dignity wage in Ecuador. They have a minimum wage. The dignity wage is when companies pay shareholder dividends, then they are required to pay labourers additional wages. It may incentivise workers to raise productivity if they know increased profit will benefit them. This approach counters the argument that increasing wages hinders economic growth. Once a framework is adopted, there are many innovative ways to actualise the dignity wage. Owners can make workers allies around profit and productivity if they can show that workers can reap some of these gains. There are many other ways in which a dignity wage can be provided. Buyers can offer to pay more if a portion of the costs goes towards wages, so they know that they are not paying more just to owners. In an era where brand reputation matters, this arrangement can be something that brands and owners can boast of as a best practice. The resistance will not be in how to implement a law around a dignity wage, but in acknowledging that companies and society have a moral and ethical responsibility to provide a wage that is respectful of one's labour.   Dignity wage changes the nature of the relationship between the worker, owner and brand

Of course, even if we adopt the concept of a dignity wage, it would not erase an inherent capitalist tension between businesses to make profit and to reduce labour costs, or workers' desire for increased wages. Perhaps calling it “dignity wage” would mask the often gross inequities of global capitalism. However, tying the wage debate to that same system without exploring how to transform the relationship between an employer and worker will only provide wages that the employer wants to give rather than the wage we as a civil society require.  

With the recent focus on corporate social responsibility, a dignity wage is the best practice for companies that want to do good for their employers and to stand out at a time when sophisticated and conscientious consumers are seeking fair trade products.  As a consumer, if I know that a product was made by a worker who was paid a dignity wage, I am more likely to purchase that product.  Whatever cost the brand pays at the outset will be recouped from consumers who are more aware of the sourcing of what they buy. It can provide a meaningful way to demonstrate best corporate practices. Otherwise, most CSR becomes marginalised public relations gimmick.

This shift from an economic-based mode of framing wages to a human rights one is sorely needed, especially in Bangladesh and throughout Asia as well in the United States, where workers are fighting for increased wages.  

The writer is Editor and Curator, Law@theMargins. Follow her on twitter @lawatmargins