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Living Wages Around the World

Manual for Measurement

Richard Anker and Martha Anker

This manual describes a new methodology to measure a decent but basic standard of living in different countries and how much workers need to earn to afford this, making it possible for researchers to estimate comparable living wages around the world and determine gaps between living wages and prevailing wages, even in countries with limited secondary data.
Open access

Richard Anker and Martha Anker

Chapter 1 briefly reviews the concept of a living wage, shows that it has a long and distinguished history and has had a recent upsurge in interest and acceptance from governments, multinational companies, unions and NGOs. It is shown that there is a general consensus on its definition, and the living wage definition agreed on by the organizations that are partners in the Global Living Wage Coalition is presented. Chapter 1 discusses why a new methodology is needed to measure living wages around the world, gives an overview of the principles behind the Anker methodology for estimating a living wage, discusses the extensive experience in using the Anker methodology in living wage studies in urban and rural locations around the world, indicates why some subjectivity is not an obstacle to economic concepts, and how a living wage differs from minimum wage. This chapter points out that living wage studies are designed not only to estimate a living wage, but also to put that estimate into context as a catalyst to further action.

Open access

Richard Anker and Martha Anker

Open access

Richard Anker and Martha Anker

Food is almost always the most important expense of households in developing countries. In the Anker methodology, the cost of food is based on local food prices and a model diet that is nutritious in more than just calories, is consistent with local food preferences, and is relatively low in cost for a nutritious diet. Chapter 3 describes in detail the nutritional needs of people and the nutritional content of major food groups such as cereals, legumes, dairy, vegetables, fruits, and oils. Two Excel programs are described that were developed by the authors to help researchers to create an appropriate model diet for estimating food costs for a living wage. The first Excel program calculates the required number of calories per person (based on age, sex, body size, and level of physical activity). The second Excel program helps researchers create a model diet that meets multiple WHO nutritional requirements, is palatable to the local population, and is relatively low in cost for a nutritious diet. Chapter 3 explains why these new Excel programs were needed, describes the logic behind them, and takes the reader through each step of creating an appropriate model diet for a living wage. The nutritional content and percentage edible of many common foods are provided in an annex.

Open access

Richard Anker and Martha Anker

Open access

Richard Anker and Martha Anker

Open access

Richard Anker and Martha Anker

Chapter 6 is concerned with estimating the cost of acceptable housing. It describes how to do a local housing market survey to obtain the cost of rent (and utilities) for decent housing that meets the local housing standard discussed in Chapter 5. It includes tips on how to conduct an efficient local housing market survey, and provides an example of a housing survey questionnaire form. The chapter discusses how to analyze and present the results of a local housing market survey. Chapter 6 also discusses how to estimate housing costs when the rental market for decent housing is not well developed, and so there are very few rental units available that meet the local housing standard for decency.

Open access

Richard Anker and Martha Anker

Chapter 7 describes how to estimate essential needs for decency besides food and housing. Since it would not be practical to list, agree on, and price all essential non-food non-housing (NFNH) needs, the Anker methodology uses secondary data from a recent household expenditure survey to help estimate essential needs. The ratio of NFNH costs to food costs from a recent household survey is multiplied by the cost of the living wage model diet. This chapter discusses the considerable variability in how countries measure and classify food, housing and NFNH costs in surveys and statistics, and how to adjust for this variability so that the NFNH to food ratio used to estimate NFNH needs is consistent with the Anker methodology. A list of what is included in each expenditure group in CIOCOP (Classification of Individual Consumption According to Purpose) is included in an Annex.

Open access

Richard Anker and Martha Anker

Because the estimate of non-food non-housing costs (NFNH) is based on secondary data and not on normative standards, the Anker methodology includes extra checks dubbed post checks on the preliminary estimate for NFNH costs, to ensure that enough is included in NFNH costs for the education of children and adequate health care, because these are considered human rights around the world. A post check for transport costs is sometimes also done when this is a large expenditure for families. Chapter 8 describes the general principles and approaches to carrying out a post check. A description of a transport post check is included in an annex.

Open access

Richard Anker and Martha Anker