IDH 2024 Annual Report: Better Jobs

Jump to:

Introduction Impact in Numbers Highlights Case Study

Advancing decent work and wages

The case for better jobs

Most of the world's working poor are employed in agricultural and manufacturing value chains. These sectors are critical for reducing rural poverty, especially in emerging markets.

However, the structure of these global value chains frequently fails to provide adequate wages and safe working conditions, leaving many workers trapped in poverty and vulnerable to various human rights risks. Rising food and energy costs, global conflicts, and instable markets only exacerbate the problem.

According to the United Nations, over a billion working people worldwide –1/3 of all workers – do not earn enough remuneration to afford a decent standard of living for themselves and their families, also known as a living wage. This means that the many farmers and workers who are essential to global value chains are unable to afford basic human needs such as sufficient food, water, housing, education, healthcare, transportation and clothing. In addition, almost 3 million people die from work-related causes each year.

IDH and its partners are committed to breaking the cycle of inequality by promoting better jobs— those that ensure living wages, worker representation, safe and dignified working conditions (including protection from gender-based violence), and equal opportunities for both women and men—across global value chains.

Transforming barriers into benefits

Decent work is not only a key element to lifting people out of poverty, but also to creating economic resilience, social stability, and business success. According to the World Economic Forum and the Business Commission to Tackle Inequality, a globally implemented living wage could generate USD$4.6 trillion in additional productivity and spending. Companies offering decent work and wages enhance business resilience by reducing turnover and boosting worker commitment.

Over the last 15 years, IDH has collaborated with partners to cocreate sustainable solutions to inequality through sector-specific joint industry commitments, regional value chain development, and cross-sector guidelines towards close living wage gaps and improve working conditions. This approach is driven by the belief and evidence that decent work is essential for strong, sustainable businesses.

A roadmap to close living wage gaps

To help companies achieve their living wage goals, IDH and partners developed the Roadmap on Living Wages, which aims to drive international alignment by providing the resources and tools needed to identify and close the gap between a living wage and what many workers earn. The roadmap outlines five actionable steps with practical tools through which companies can progress, from measuring to action. This includes the IDH Salary Matrix, which helps calculate living wage gaps, and the IDH Living Wage Action Guide, which offers solutions on how to take steps with supply chain partners to close living wage gaps.

Visit the RoadmapVisit the Roadmap

What’s happening through our partnerships

*Cumulative results for 2024 against the 2021-2025 funding cycle

Better Jobs in Action

Highlights from 2024

Piloting living wages in the tea sector

Most tea workers in key tea-producing origins, such as Kenya, Sri Lanka and Malawi still earn significantly below what is considered a Living Wage. While several tea packers and buyers showed a willingness to address this gap, they faced challenges in calculating, collecting, and distributing funds due to complex political, market, and production factors. To tackle this, IDH convened a coalition of packers, buyers, and producers, representing 26% of the tea sold by producers in these regions, to pilot a Collection & Distribution (C&D) mechanism aimed at improving worker remuneration and livelihoods. In 2024, the pilot successfully transferred €715K of additional financial value into the tea value chain, directly benefiting almost 13.000 workers through an additional cash bonus. This initiative serves as a proof of concept for scaling solutions to reduce the Living Wage gap and enhance livelihoods across tea origins.

Strengthening the workforce in Kenya's textile and apparel sector

The Textile and Apparel sector in Kenya, a vital contributor to job creation, is hindered by workforce training gaps, low retention rates, and insufficient worker well-being. While global supply chains increasingly source from Kenya, the sector needs skilled workers and sustainable practices to realise its full potential. Since 2022, IDH and Generation Program Kenya (GPK) have tackled these issues through the Kazi Bora (Better Jobs) project, focusing on skills training, job placement, better working engagement, and wellness. The project also promotes dialogue between workers and management, strengthening workplace relationships, and has trained 100 supervisors and middle managers, advancing sustainable growth in the industry. So far, over 3000 Kenyan youth and women have been enrolled and trained in relevant industry skills such as sewing machine operations. Over 70% of the participants have been successfully employed.

Supporting Lidl to calculate living wage contributions in bananas

Many companies actively work to close living wage gaps in their supply chains but face challenges in accurately calculating and reporting voluntary contributions. Drawing on years of testing and collaboration, IDH provides tailored support to address these needs. For Lidl, this meant using the IDH Salary Matrix to pinpoint wage gaps and implementing a custom calculation tool to allocate contributions based on purchase volumes. With support from IDH, Lidl piloted the tool in Colombia and the Dominican Republic, provided supplier training, and ensured transparency through FLOCERT verification, including on-site audits. Learnings from the project were integrated into a digitised costing tool, extending benefits to other retailers committed to living wage initiatives.

Case Study

Laying the foundation for universal living wages

The International Labor Organisation has long recognised fair wages as fundamental to peace and prosperity, a principle enshrined in its founding in 1919 as part of the post-World War I Peace Treaty. Up until recently, however, conditions such as lack of market transparency and inadequate wage setting mechanisms have hampered individual company and collective efforts to close living wage gaps.

New emphasis on social sustainability and the recognition that living wages build more resilient supply chains has led to renewed willingness in the private sector to overcome these challenges. At the same time, international coalitions have formed to gather and share data, test solutions, and define best practices within global sectors.

Making living wages mainstream

2024 was a significant year for the living wage agenda. A strong foundation has been built through uniform definitions and guidance, sector and company pilots, and upcoming due diligence legislation such as the EU Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Corporate Sustainability Reporting Directive (CSRD).

Building on this foundation, frontrunning businesses began integrating these concepts into their strategies and making commitments to ensure that their workers are paid at least a living wage. Multi-stakeholder initiatives have emerged in sectors like tea and bananas, alongside individual commitments from brands and retailers, such as voluntary payments to workers.

IDH supports these actions through local and global convening, as well as tools and guidance to help stakeholders in global value chains improve their approaches, such as sustainable procurement and due diligence practices. IDH is dedicated to improving living standards for workers everywhere by making these guidelines practical and effective. By integrating living wage principles into industries such as agriculture, apparel, and aquaculture, IDH aims to drive widespread adoption and create lasting positive impact on workers' livelihoods.

^“

The world’s 2000 most influential companies employ 99m people directly and provide indirect employment to hundreds of millions more through their supply chains—yet only 4% take meaningful action towards paying these people a living wage. The results show that the impact companies have on people is today nowhere near consequential enough to the success of business...

Gerbrand Haverkamp– Chief Executive Officer, World Benchmarking Alliance (WBA)

With collective influence, we can change that—so it pays to lead, and costs to lag. That’s why the World Benchmarking Alliance and IDH collaborate, to drive collective action.

Gerbrand Haverkamp– Chief Executive Officer, World Benchmarking Alliance (WBA)

1 | 2

International guidance takes the stage

The adoption of the conclusions of the meeting of experts on wage policies, including living wages by the International Labour Organization (ILO) in March represented a milestone in advancing living wage efforts. The guidance offers much-needed clarity on the concept of living wages, and provides principles for the estimation of living wages, paving the way for brands and retailers to further enhance and coordinate their efforts.

The conclusions were developed through a background document for the meeting of experts which references IDH’s work on living wages as being among the most significant initiatives and recognises the Roadmap on Living Wages, Salary Matrix and related tools, as well as the IDH Call to Action with businesses to build a living wage economy.

On an international level, IDH also continued its collaboration with the United Nations Global Compact Forward Faster Initiative, which supports companies to accelerate progress towards the SDGs through five areas of action, including living wages. IDH helped to shape the corporate targets on the living wage topic, as well as integrating and aligning with key elements and tools of the Roadmap on Living Wages into the Forward Faster Living Wage Guide.

As of 2024, over 600 global companies signed up to the targets to implement living wages in their own operation or work with their supply chain partners to work towards living wage. IDH continues to engage in dialogue with these companies to ensure that these tools provide relevant, achievable steps that help overcome common challenges on the path to action.

Dutch initiatives for global outcomes

On a national level, IDH began collaborating with the Netherlands Enterprise Agency (RVO) to promote the uptake of companies based in the Netherlands for living wage and living incomes in global supply chains as part of an integrated agenda to enhance corporate social responsibility for sustainable development. IDH was selected as the RVO living wage and living income expert organisation to think together on activities such as trainings and further consultations.

In June, at the Living Wage and Living Income Summit held in Amsterdam, over 400 guests from more than 250 organisations across the supply chain came together for the event, jointly hosted by IDH with GIZ and the UNGC. During the Summit, companies discussed practical examples of acting on living wage and living income and some contributors shared milestones and innovations from their work.

The next steps

Building on the momentum of 2024, IDH will continue these wide-reaching collaborations in 2025 to help embed living wage practices in resilient global value chains where poverty wages no longer have a place.

The clear commitments among the business community to integrate living wages into value chains demonstrate that fair wages are not just viable but beneficial. With the ILO’s 2024 guidance, the path forward is clear: governments, businesses, and civil society must act now to make living wages the standard, not the exception.

IDH 2024 Annual ReportPrevious: Next: Better Incomes