Increasing respect for labour rights and paying living wages to advance decent work for all

People are the bedrock of business. Companies that invest in people by ensuring living wages, safe working conditions and implementing other worker protections aren’t just doing the right thing; they’re building stronger businesses, driving economic growth and creating a more sustainable and equitable future for all. 

The rights, respect and well-being of workers lie at the heart of a sustainable global economy. 

By investing in happier, healthier people, businesses have the power to create a world where economic growth benefits everyone, not just a few. 

By ensuring a living wage for all workers, companies can demonstrate their respect for labour rights and advance decent work. This can increase productivity and innovation, attract and retain top talent and strengthen the supply chain and economic stability. 

What is a living wage? 

According to the International Labour Organization, a living wage is “the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country's circumstances and calculated for the work performed during the normal hours of work.”

Living wage and minimum wage are not the same. In many countries, when minimum wages are set, there is an imbalance between the consideration of economic factors and workers’ needs. As a result, minimum wages often fail to ensure a decent standard of living.  By going beyond legal compliance, businesses can ensure their employees earn the necessary income to support their needs and those of their dependents, raising standards of health and well-being.

Today, over a billion working people worldwide –1/3 of all workers – are estimated to earn less than they need to afford a decent standard of living (source: BCTI). 

Paying living wages ensures all workers, families and communities can live in dignity. 

In 2025, the world of work is undergoing rapid transformation. Technological shifts, rising inequalities, global supply chain disruptions and geopolitical tensions are placing new pressures on businesses and workers alike. Amid these challenges, the fundamental rights of workers and the need to ensure a decent standard of living remain non-negotiable and crucial to promoting economic security and ensuring community resilience during tumultuous times.  

The ILO estimates that more than 160 million children are still engaged in child labour and 27 million people are trapped in forced labour. Millions more face job insecurity, unsafe working conditions and discrimination — especially women, migrants and other vulnerable workers, regardless of the region of the world. 

One of the most effective ways to address these systemic issues is by implementing living wages. When workers earn enough to meet their basic needs, the economic pressure driving child and forced labour is significantly reduced. Living wages promote financial security for families and their children, allowing workers to plan for the future, access healthcare and education and participate more fully in society. 

For women and marginalized groups often facing wage disparities and job precarity, paying living wages helps close inequality gaps and foster inclusive, equitable workplaces. 

In short, living wages are not just a solution to the problem of inadequate incomes — they’re a powerful lever for broader social and economic transformation.

Paying living wages positively impacts people's well-being and businesses’ bottom lines. Companies that pay living wages create safe working conditions, attract and retain top talent, reduce turnover and build a more engaged and motivated workforce. Living wages also create stronger markets, as workers with financial security reinvest in their communities. 

1. Increased Productivity and Morale

When employees are paid fairly, they’re more financially secure and invested in their workplace. Living wages reduce the stress of daily survival, allowing workers to fully engage with their roles. 

Additionally, companies that prioritize living wages are better positioned to attract skilled, motivated employees, boost operational efficiency and give themselves a reputational edge in crowded markets. Collaboration and creativity can flourish in a workplace grounded in fairness and equity. 

2. Cost Savings

Organizations that pay living wages experience fewer labour disputes and grievances, improving operational continuity and reducing costs associated with disruptions, mediation or lost productivity. Stability in the workforce leads to efficiency in the bottom line. 

3. Enhanced Reputation and Market Access

With stakeholders demanding more from businesses, living wage commitments speak volumes. By setting commitments and strategies to pay living wages, companies can build trust and credibility. They become more appealing to investors and customers, gaining a competitive edge in markets where sustainability and social responsibility are becoming prerequisites rather than preferences.

4. Strengthened Supply Chain Relationships

Much of the global economy relies on complex, multi-tiered supply chains, and it’s often in these hidden layers where the most severe labour rights violations occur. Companies must proactively map their supply chains, conduct human rights due diligence and identify where low pay is a risk or will negatively impact workers’ rights. A company’s commitment to decent work cannot stop at its front door.


5. Financial and Operational Benefits

Living wages put more money into the hands of people who will spend it. This stimulates broader economic activity and often comes full circle to benefit the very businesses paying those wages.
 

6. Showcased Commitment to Upholding Human and Labour Rights

Paying a living wage is one of the most concrete ways a company can demonstrate its commitment to human rights. It signals that the business takes its responsibility seriously, embedding ethical labour practices across operations and supply chains. Living wages confirm that dignity at work is non-negotiable.

Advancing decent work in business requires collaboration across stakeholders — with workers, workers’ and employers’ organizations, governments, civil society and other companies. 

You are not alone. The United Nations Global Compact is ready to support with tools, guidance and training. Get started today with: 

• Commit to the Forward Faster Living Wage targets. The Forward Faster Living Wage Action Guide provides companies with additional, target-specific details on key definitions, examples of actions and Key Performance Indicators (KPIs), including interim targets, resources and options that companies can utilize as they define a strategy to meet the targets.
• Analyze current operations. The Living Wage Analysis Tool is a free, user-friendly and strictly confidential online tool that helps companies identify opportunities and actions to provide a living wage to ensure all workers, families and communities can live in dignity.
• Consider an Accelerator Programme. Our Business & Human Rights Accelerator helps companies advance responsible sourcing practices, identify and address labour risks and embed human rights into core operations. 

Living wages are an essential aspect of decent work. When companies promote and provide living wages, they promote a safer, healthier and more sustainable future.