A methodology to estimate the needs of workers and their families for the purpose of wage setting, including living wages
This report outlines the ILO’s methodology for estimating the needs of workers and their families to support evidence-based wage setting, including living wages. It provides practical guidance for using household income and expenditure surveys and economic data to inform social dialogue, in line with ILO principles adopted in February 2024.
Setting adequate wages is essential for decent living standards for workers and their families, while ensuring enterprise sustainability. Determining adequate wage levels, however, is complex and requires an evidence-based approach that considers the needs of workers and their families, as well as various economic factors.
This report provides a detailed description of the ILO Methodology to estimate the needs of workers and their families for the purpose of wage setting, including living wages. The objective of the methodology is to strengthen the capacity of governments, employers’, and workers’ organizations to use data on the needs of workers and their families, along with economic factors, to engage in evidence-based social dialogue for wage setting.
This technical document provides guidance on using household income and expenditure surveys to estimate the needs of workers and their families through a multidimensional approach that considers the cost of adequate food, housing, healthcare, education, and other essential goods and services. The methodology was tested in several countries, including Colombia, Costa Rica, Côte d’Ivoire, Ethiopia, Indonesia and Viet Nam.
The methodology aligns with the ILO principles to estimate living wages, as agreed, in February 2024, during the tripartite Meeting of Experts on wage policies, including living wages.
