Rising global inequality demands action on living wages

Global inequality is rising, undermining progress on social development, social cohesion, and human rights. Recent evidence, including the World Social Report 2025 and the World Inequality Report 2026, shows that income and wealth gaps continue to widen, while nearly 60% of workers worldwide face employment insecurity.

The ILO’s Global Employment and Social Trends 2026 report further highlights that 284 million workers still live in extreme poverty (less than US$3 per day). Together, these trends threaten inclusive growth, social stability, and the commitment to leave no one behind.

Against this backdrop, living wages have emerged as a central pillar of the global social justice agenda. The World Social Summit in Doha last December marked a turning point, with governments, businesses, the UN system, and civil society jointly recognising living wages as a critical driver of poverty reduction, decent work, and social inclusion. Anchored in the Summit’s Political Declaration, living wages are now firmly positioned as a shared global priority and a practical lever for advancing social development outcomes.

At IDH, we see living wages as one of the most effective, action-oriented responses to rising inequality. Around 465 million jobs globally, approximately 15% of total employment, depend on foreign demand through global supply chains. Progress on living wages in these sectors can directly improve incomes for millions of workers, strengthen local economies, and contribute to more resilient and equitable growth.

Evidence increasingly shows what is possible when action is coordinated:

• In banana-producing countries, multi-stakeholder initiatives have raised wages for thousands of workers.
• Across Europe, retailers are adjusting purchasing and sourcing practices to help close living wage gaps in their supply chains.
• In agricultural sectors such as sugarcane, collective bargaining and employer engagement have contributed to measurable wage improvements and safer working conditions.

These examples demonstrate that shared prosperity is achievable when governments, businesses, and workers’ representatives act together. Yet the gap between commitment and implementation remains wide. The World Benchmarking Alliance Social Benchmark finds that only 4% of the world’s 2,000 most influential companies currently pay living wages or have credible targets in place. At the same time, rising informality continues to expose workers—particularly in agriculture, construction, and supply-chain-linked services—to low pay, unsafe conditions, and limited social protection.

As global discussions on inequality, decent work, and the future of social development intensify, the message is clear: living wages must move from principle to practice. This moment calls for coordinated action across policy, business, and social partners to translate political commitments into tangible improvements for workers and their families.

This is the focus of the CSocD64 session in February 2026 and of our CSocD64 side-event webinar, which will explore how the Social Justice Coalition’s momentum, building on the World Social Summit, can accelerate the implementation of living wages. Drawing on new private-sector data, government perspectives, and practical country and supply-chain experience, the discussion will highlight concrete pathways to align wages with social justice, decent work, and inclusive development

At IDH, we are committed to supporting this shift from commitment to delivery, through practical tools, evidence-based guidance, and multi-stakeholder convening that enables real, measurable progress on living wages worldwide.

Read more on IDH’s commitment to making living wages mainstream here.