Living wage
A living wage is the wage level needed to afford a decent standard of living for workers and their families, taking national circumstances into account and earned during normal working hours. It is context-specific, should be estimated through evidence-based and transparent methods, and should be achieved through wage-setting processes that respect local institutions and social dialogue.
In simple terms
As of 2026-08-12, the International Labour Organization’s 2024 tripartite conclusions remain the basis for its living-wage concept and estimation principles, and the ILO reported implementation progress in 2025. Estimates depend on geography, household assumptions, food, housing, healthcare, education, transport, taxes, working time, and the date of cost data. A benchmark is therefore neither universal nor timeless. It can inform wage-setting, responsible sourcing, and sustainable procurement, but it does not replace statutory minimum wages, collective bargaining, or national wage-setting institutions.
Why it matters
Pay below a credible local benchmark can leave full-time workers unable to meet essential needs and can undermine decent work. Wage analysis also helps explain vulnerability to modern slavery and child labour, although those harms have distinct causes and legal definitions. Transparent assumptions allow workers, employers, and buyers to understand what a benchmark represents and how quickly inflation can make it stale.
Example
A buyer commissions a location-specific estimate, discloses the household and cost assumptions, and compares normal-hours cash wages and eligible benefits consistently. It then works with employers and worker representatives on a time-bound improvement plan and reviews its own prices and lead times. Overtime earnings are not used to make an inadequate normal-hours wage appear sufficient.
How it differs
Decent work
A living wage is a context-specific wage level for a decent standard of living; decent work is a broader agenda covering employment, rights, social protection, and social dialogue.
References
Current status
- As of
- Issuer
- International Labour Organization
- Jurisdiction
- Global
- Instrument or version
- ILO conclusions on wage policies, including living wages (2024)
- Status
- The ILO’s 2024 tripartite conclusions remain the basis for its living-wage concept and estimation principles; implementation progress was reported in 2025.
Applicability: A living-wage estimate is context-specific and can inform wage-setting; it does not replace statutory minimum wages, collective bargaining, or other national wage-setting institutions.