WSSD2 Brief

Advancing decent work for all: The role of wage policies, including living wages

The policy brief discusses the role of wage policies, including living wages, in advancing decent work and social justice. It highlights wage trends, persistent inequalities, the importance of minimum wage systems, and the need for evidence-based wage-setting processes through social dialogue.

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Key considerations for WSSD2

Despite wage growth in 2022 and 2023, millions of workers in the global economy continue to earn wages and incomes that are insufficient for a decent standard of living. In many countries, minimum wage systems are inadequate and have failed to keep pace with inflation during the cost-of-living crisis. In developing economies, the problem of low wages is compounded by the large share of own-account workers, whose labour earnings are even lower than those of wage workers and who overwhelmingly work in the informal economy with limited social and labour protection.
While wage inequality has declined in a majority of countries since the beginning of the century, it remains high in many countries and global wage inequality remains enormous. In all country income groups, women continue to earn lower wages than men.
Wage policies, including living wages, contribute to reducing poverty and inequality and advancing social justice. Collective bargaining and/or adequate statutory minimum wage fixing through tripartite social dialogue should be reinforced as the proper modality for setting and adjusting wages.
In 2024, governments, employers’ and workers’ organizations reached an agreement which should be followed for the estimation of living wages and their operationalization within broader wage-setting processes, taking into account both the needs of workers and their families, and economic factors.