Criteria for Recognizing LW Benchmarks Methodologies
In order to calculate the gap between current wages and living wages, companies need reliable living wage benchmarks for every region they source from. IDH is committed to assist companies from the starting point of closing living wage gaps with up-to-date, credible living wage estimates that are relevant to their respective locations.
The Anker methodology is widely accepted as the gold standard for measuring living wages and it has played an important role in catalysing wage improvement in global supply chains. We recommend the use of this methodology, which is supported by members of the Global Living Wage Coalition that IDH works with. Additionally, IDH acknowledges that there are other methodologies available to calculate living wage benchmarks. When a benchmark using the Anker methodology is not available, IDH has developed a process to recongnize living wage benchmark methodologies that meet the following criteria:
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These criteria do not represent a new living wage estimate methodology but provides objective criteria for the minimum elements a living wage methodology needs to include to be recognized by IDH. The list of recognized living wage benchmark methodologies that demonstrated meeting these characteristics will be published on IDH’s website.
Each living wage benchmark is specific to a time and location. Still, it may be the case that more than one benchmark meets the above criteria for a location. In case of multiple benchmarks available, IDH recommends prioritizing benchmarks that are:
- Endorsed or vetted by a legitimate and representative local organization, for instance, through a mechanism for vetting living wage estimates with stakeholders in an open and transparent way.
- Most specific to the area (first location-specific, then urban or rural benchmarks).