Employers Welcome ILO Tripartite Consensus on Wage Setting and Living Wages

Employers, Workers and Governments at the ILO agreed last week on balanced and fair principles and calculation methods for living wage determination.

Employers at the International Labour Organization (ILO) welcome the consensus reached last week on balanced and fair principles and calculation methods for determining living wages during a Meeting of Experts on Wage Policies, including Living Wages, held from February 19 to 23, 2024.

Following intense negotiations, which ended late Friday evening, the tripartite constituents successfully concluded the meeting with an accepted concept of living wages, which incorporates the needs of workers and their families alongside an assessment of the economic environment, including economic development, levels of productivity and employment together with the sustainability of enterprises.

This dual approach ensures that wage-setting processes are balanced towards both workers and business, relying on data and statistics for an evidence-based approach tailored to national circumstances.

Constituents also agreed that wage-setting processes need to be carried out in a national framework. This is vital to ensure that local realities related to the cost of living and economic prospects are fully integrated.

Additionally, tripartite constituents concurred that a living wage-setting process needs proper governance. The conclusions of the Meeting of Experts highlight that many living wage initiatives currently overlook crucial elements; in particular the principles advocated by the ILO, including tripartite social dialogue. Furthermore, factors like local context, root causes of low pay and economic conditions are frequently disregarded, especially when implementing living wage policies.

Employers welcome the central role of the ILO in developing a proper methodology for living wages and the assessment of economic factors.

Moving forward, Employers urge all international and national stakeholders involved in wage-setting processes to apply the ILO principles and methodologies jointly agreed upon by the constituents.  

“This outcome establishes the ILO and its tripartite governance as the reference institution on issues related to wage-setting processes. We urge all those involved in wage-setting to consult and implement the principles and methodology,” said Vice-Chair and Officer of the Employers’ Group of the ILO Governing Body Renate Hornung-Draus, who is also IOE Vice-President to the ILO.