Standards for a Living Wage/Income
The Purchasing Power Index uses set standards for determining the Sustainable Living Wage or Sustainable Living Income in each country and community where the standards are applied. The standards have been set for the following categories:
Housing and related costs
Housing and Related Costs
Housing and related costs are often the highest costs to the worker and the worker family. These are costs that MUST be paid if the family, no matter how large or small, is going to live and function as a unit. There are numerous dimensions to consider when evaluating housing costs. These must be examined carefully in order to arrive at a fair understanding of their relationship to a Sustainable Living Wage/Income housing standard.
It is necessary to set the context for the reality in which many workers live. Words or expressions such as apartment owning, home under construction, or living rent free convey to the average person in the US a sense of living in well constructed housing units. For workers in many countries a different understanding of homes and houses is needed. The poorest urban dwellers often live in shacks made of tin or cardboard. Other families rent one-room apartments in buildings with communal facilities. Common rural homes are simple one-or two-room houses made of branches woven together and covered with mud, with dirt floor and thatched or tile roof. Sturdier homes may be made of materials such as cement blocks.
The underlying questions in establishing standards are the following: What should housing provide? For whom? Often there is an underlying assumption that as long as people are living in a situation that is better than what they had before OR allows them to be in a process of bettering conditions for themselves and their families, this is sufficient. Why should that be? Does not every worker, in return for decent work, have the right to a decent standard of living?
Whether the homes are located, the standards that a home should provide are the same. They include many of the ordinary requirements for housing that are taken for granted in other parts of the world. While many workers live in homes that do not provide all of these items, that is from financial necessity, not from a free choice. Therefore, the Purchasing Power Index studies use the following housing standards.
Purchasing Power Index Standards for Housing and Housing Related Costs
The house should provide:
Shelter from the elements. This includes walls, roof and a floor.
Protection from public exposure. This includes a door that locks as well as solid walls.
Ventilation. This includes windows that can open and shut.
Running water for laundry, sanitary needs and general washing of household items.
Adequate space to provide sleeping spaces for all members of the family as well as
Sufficient living space to be sheltered from rain and/or extreme heat when necessary.
Space for cooking.
Space for bathing.
Space for meeting sanitary needs so that there is no risk of contamination.
Housing Related Costs
Depending on where one lives, what one is doing, the time of day, etc., lighting may come from electricity, kerosene lamps, candles or other sources. Because electricity is the preferred form of lighting, the cost of electricity will be used for the PPI standard.
Cooking fuel and stoves
Different homes have different types of fuel. Propane gas, wood and charcoal are some of the fuels used for cooking. Use of propane gas requires the purchase of propane tanks to be hooked to the stove. Each of these has costs. Some are on-going and some are a single time expense. Repair or replacement expenses are not usually part of the weekly expenses that must be met, but funds must be set aside to pay for these expenses as they become necessary. Such set-aside money is included as part of the SLW/I standard.
Water: potable and non-potable
Two forms of water are necessities:
potable (safe drinking water) and non-potable. In many countries and/or communities, water that may be piped into dwellings is non-potable. Potable water must be purchased separately. It is a cost that many cannot afford. Regular piped water, provided as part of municipal services, must also be paid for unless another water source is available. Water needs to be sufficient for personal hygiene, for laundry, for household cleaning. Without sufficient water, a healthy standard of living is not possible.
Transportation is required for several aspects of everyday life. Bus transportation is often the norm in many countries, with the cost dependent on where one is going. Transportation may be required for work, for shopping, for health care. In some cases, workers receive subsidized transportation provided by the specific employers or by a specific free trade zone. However transportation for shopping and for meeting other needs still remains a cost for which sufficient purchasing power is required.
Since the normal workweek is 5-6 days, money to pay for round trip bus trips must be part of the Sustainable Living Wage Income. (SLW/I)
The transformation of a house into a home requires more than just walls, floor and roof. There are basic articles needed for bedding, personal cleanliness, cooking, eating, cleaning and laundry that transform any space into a home. These are not items that are purchased all at once. However, anyone who has set up an apartment for the first time knows the myriad items that are needed to be at home in a given space. We also recognize that these items, once bought, do not have to be replaced on a frequent basis. However, this list is presented as a relatively minimal list of items needed.
For the purpose of this study, the following assumptions have been made.
Sleeping should not normally be done on the floor or the ground.
Sleeping requires some sort of bed and bedding. The bedding includes the following: pillow, sheets, pillowcase and blankets. Weather can vary, thereby requiring different types of bedding to respond to the weather. Even within a specific country, weather can vary greatly.
When houses lack insulation or protection from the cold, additional blankets or other items are required to provide warmth.
A bed requires more than one set of sheets to allow for washing. If there is more than one bed in a home, the extra set of sheets can be rotated as each bed sheets are washed, but the extra set is necessary.
Children should sleep separately from their parents. This requires separate bed(s) for children.
Towels are necessary for bathing. As a standard, one towel and washcloth (or other parallel item such as a sponge) should be available for each person in the family.
Basic cooking items include the following: large cooking pot, clay pot, frying pan, large knife, spatula and cooking spoon. In addition, bowls to mix and prepare foods are necessary. There are other items of varying sizes that families use, but the items listed are basic necessities. For each person in the family, there should be a plate, bowl, cup or glass, as well as eating utensils, including knives, forks, small and large spoons. In addition, a large bowl for setting out food is helpful.
There are many other items that, when funds are available, help to enrich the lives of workers and their families. These include simple tools such as hammers, screwdrivers, nails, etc. that assist the worker and the worker’s family in the gradual transformation of the house into a home.
Clothing and shoes are available in two general forms, new and used. New clothing is available from a variety of stores, both small and large. New clothing is also sold from vendors at the various markets. As would be expected, new clothing prices are many multiples of used clothing prices. Many stalls at open-air markets carry a broad variety of used clothing.
New clothing prices are collected from as many sites as possible. The new clothing items priced are for standard articles for men, women and children as well as babies. School uniform prices were also collected where the norm is for students to wear uniforms.
Clothing Standard: Each member of the family has sufficient clothing to be appropriately dressed for school, work and social occasions.
Everyday clothing is needed as well as something reserved for church, social occasions, etc. Depending on the specific work a person does, there is a definite need for some articles of clothing reserved for dirty work such as construction, cleaning, etc.
Since much laundry is still done by hand in poor countries, and many women are part of the workforce, especially in the assembly plants, it is logical to say that a person, whether child or adult, needs to have sufficient clothing to get through the work or school week without laundry needing to be done. The doing of laundry requires time, good drying weather, and access to sufficient water for washing and rinsing.
The amount of clothing needed by adults is different from that needed by children. Adults do not grow while children grow continuously. In addition, children of school age need school clothes and non-school clothes as well as something reserved for special occasions. Babies and small children exhibit other needs, especially for diapers. The use of disposable diapers is commonplace. Based on these requirements, the listing of clothing below is the minimum for a Sustainable Living Wage and/or Sustainable Living Income standard.
Purchasing Power Index Standards For Clothing For Adults
For adults, the following standard is used for amounts of clothing:
1 set of clothing for good wear
7 shirts or blouses
3 pairs of pants or skirts
7 sets of underwear
1 pair of everyday shoes
1 pair of dress shoes
2 sweaters, sweatshirts or other
light over garment.
7 sets of socks
The following is used as a yearly replacement standard. To be replaced every year:
Two blouses or shirts
One pair of pants
Set of clothing for good
wear, which then moves to
For children, the following basic clothing standards are used:
1 set of clothing
1 pair of shoes
7 sets of everyday clothing
1 pair of sneakers
7 sets of underwear
2 sweaters, sweatshirts or other
7 pairs of socks
Because children grow so fast and continually, and because they are much harder on clothes than adults, all of the above items for children need to be replaced each year, although not necessarily at the same time. In addition, school age children need school uniforms. A minimum of 2 uniform skirts or pairs of pants needs to be paired with 3 school shirts or blouses to allow for the soiling of clothes through normal child behavior.
For small children and babies, there are other needs in addition to clothing. Diapers are an on-going cost. If a child needs, on average, 6 diapers per day, the weekly requirement is a minimum of 42 diapers. (Cloth diapers for purchase could not be located.) The rapid growth of babies means that baby clothes are quickly outgrown and have to be replaced. Our standard is a minimum of 7 sets of baby clothes, even though it is possible to argue that this is a lower amount than is practical simply because of the number of times that a baby diapers need to be changed.
The balance between buying new and used clothing seems to be determined by a number of factors:
Price. For the most part, prices for used clothing items are approximately 10% of the prices of new clothing items. Many families are forced to buy used clothing because of the low purchasing power accruing from the present minimum wage.
Condition of the clothing. The used clothing is sold with equal dignity and care accorded new clothing. In small stands in the open-air market, the used clothing has been washed, ironed and folded or hung on hangers with care so the articles are neat and attractive. Clothing with rips or damage is rarely seen. To purchase the used clothing is not seen as anything undignified or lacking in respect. More often, the attitude accorded the process and articles is that of finding a bargain.
Again, it is important to keep in mind that we are not listing what someone or some family can get by on. The standard of the Sustainable Living Wage of the Sustainable Living Income is not one of mere survival or getting by.
The Right to Adequate Nutrition
The issue of food is perhaps the most complicated of the elements within the PPI, because it is here that we come face to face with areas that touch on how one group of people perceives other groups. To set the foundation for this discussion, we need to first decide what is the purpose of food. For the PPI, the purposes of food are as follows:
To provide good nutrition that allows for the development of the person, physically, mentally and emotionally.
To provide the nutrients necessary for good health so as to prevent nutritionally associated diseases as well as to allow for resistance necessary to combat disease.
To prevent malnutrition
To allow for the attainment by all peoples of the highest possible level of health. To support these statements of purpose regarding food, we turned to two types of international human rights documents. In the first group are the conventions and covenants that are legally binding on those accepting them. In the second group are the declarations that, though non-binding, provide a level of moral persuasion on governments and, by extension, on corporations. The World Health Organization (WHO) has assembled a set of statements from various international instruments that both individually and collectively provide the foundation for and the recognition of the human right to adequate food and nutrition. (www.who.int/nut/human_rights.htm)
Purchasing Power Index Standards for Food
It is therefore appropriate within the context of the PPI to work from a standard that will look at the cost of food from the perspective of meeting the nutritional needs of workers and their families within particular cultural settings. In order to do this, it is necessary to distinguish the roles that food plays in preventing hunger, in providing adequate calories and/or in providing good nutrition. To prevent hunger is relatively easy. For example, sugar water, taken at intervals, will calm the appetite and prevent the sensation of hunger. What is really happening is that the person will not have the sensation of being hungry. In poor families in many parts of the world, including the United States, it is not uncommon to see bottles of sugar water being fed to infants to still their hunger pangs and get them to sleep. (Giving Kool-Aid to children is another example of this approach to hunger.)
While this provides momentary relief from the sensation of hunger, it does nothing to assist the body in attaining the calories it needs for survival for the day. (The exception being the few calories provided by the sugar in the sugar water.) Caloric intake necessary for growth is a well-documented concept with standards existing for caloric need for all age groups, according to gender. The caloric intake standards used for the PPI are taken from the standards created by the US Department of Agriculture Center for Nutrition and Promotion in their Dietary Guidelines for Americans.
The PPI uses the standard of nutrition rather than calories. This is an important distinction. A person can achieve appropriate caloric intake through the consumption of carbohydrates. This food group is usually the cheapest form of food, it is usually the most readily available anywhere, and oftentimes what is termed junk food or quick food is high in carbohydrate content. To meet caloric needs in this way is not a health appropriate form of consumption and does not meet the nutritional standards described by the WHO or the other international covenants and agreements set forth above. The standard of nutrition assumes an appropriate balance of protein, fruits and vegetables, carbohydrates, potable water as well as sources of vitamins and minerals necessary for good health for anyone, anywhere.
Some might raise the question of the appropriateness of using nutrition standards from the US for persons and families from another country. Let us be very clear that what we are saying is that healthy nutrition standards are just that, healthy nutrition standards, and that the same standards of health need to be applied to all peoples. What will differ are the foods that are used to meet those standards. Those foods will be culturally appropriate both in terms of form and content. But the need for adequate protein, fruits and vegetables, carbohydrates, unsaturated fats, etc. remains the same for all.
Some might argue that this will require a change in eating patterns on the part of workers and their families. The only appropriate response is that much of what is seen as eating patterns is determined by access to food and the monies to purchase that food. The purpose of the PPI is to determine what income is necessary to allow for the purchasing of foods that provide adequate nutrition. How that food is prepared and served is up to the workers and their families.
Purchasing Power Index Standards for Nutrition and Caloric Intake
Using the nutritional standards established by the US Department of Health and Human Services and the US Department of Agriculture, the following energy (through calories) intake is the standard for the PPI:
Age Calories per day for moderate activity Calories per day for heavy activity
The majority of the work in the factories would be termed heavy activity; therefore for the workdays, 6 per week, the standard for caloric intake will be 2600 for women and 3600 for men. On the remaining day that is filled with the many activities that comprise taking care of a household, the caloric intake would most probably be termed moderate. Although there are other levels of activity, the lifestyle of the workers mandate that moderate be used to describe life without the work-saving devices that are common in the USA.
Moving from caloric needs to nutrition needs, and using the Dietary Guidelines for supplied by the US Department of Agriculture (USDA), the PPI standards use the following guidelines for servings for older children, teen girls, active women and most men on a daily basis. [Note: These nutritional guidelines are in the process of being revised according to the new 2005 USDA Nutritional Guidelines. This revision will be completed by December 2005]
To explain the servings described above, the following chart is provided from the same sources:
How Many Servings Are Needed Each Day:
FOOD GROUP Children ages 2-6, Women,
Some Older Adults
(about 1,600 calories) Older children, Teen Girls, Active Women, Most Men
(about 2,200 calories)
(about 2,800 calories)
Meat & Beans Group
2 servings = 5 ounces
2 servings = 6ounces
3 servings = 7 ounces
For the purposes of establishing sustainable living wage standard, we use a balance of items from each of these food groups.
Foods are purchased from a variety of places. Each of these provides a range of prices. Where someone will shop for food depends on several factors:
How much money does the shopper have to spend at a given time?
What items need to be purchased?
How much time is available for shopping?
Each of these factors needs to be considered individually and in combination with the others.
When a shopper has easy access to transportation, it is easy to choose the best place from which to purchase food and other items sold. Without easy access to transportation, choice of food purchase site is related to proximity to place of work and to one's home. For many workers, the closest place for shopping is often one of the smaller stores. These are usually located in the area and are easily accessible by workers and their family members. At these smaller stores, the choices are limited but the basic items tend to be available.
The place with the best prices often tends to be the open-air markets that can be found in many countries. Fresh fruits and vegetables, meats, household items, paper products and some clothing and footwear are usually sold at these markets. Shoppers can travel from table to table looking for the best products and the best prices. It is here that shoppers find the best value for their money.
Bulk pricing when items are on sale is generally not an option for workers for the following reasons:
Extra money to buy ahead is generally not available.
Storage space is extremely limited
Items needing refrigeration cannot be stored since most homes lack refrigerators.
Transportation is another factor that must be taken into consideration when examining choices for shopping. Most workers do not own cars. Therefore to shop at a supermarket that may be at a distance requires one of the following:
]Knowing someone with a car. Workers will usually share the cost of the gasoline for the shopping.
Taking a bus to the supermarket and a bus or taxi home after the shopping is completed. The cost of each of these needs to be included in the shopping cost.
Walking home from the supermarket with the bags filled with groceries.
No matter which of these a worker has available, each transportation choice will be limited by the number of plastic shopping bags (or other carrying container) that can be carried at one time.
In an ideal world, the place with the best prices would be the site for shopping. However, the ability to do comparison shopping is beyond the daily reality of most workers. These factors all affect the ability of workers to provide adequate nutrition for themselves and their families.
To determine the purchasing power needed to attain nutrition-oriented diets at the lowest prices, they must all be taken into consideration.
Purchasing Power Index Standards for Water and Sanitation
Developing a standard for water requires an integrated understanding of the reality in which water can be accessible, acceptable and affordable anywhere in the world. A water standard requires attention to the needs and requirements associated with adequate and clean drinking water as well as sufficient water to meet the hygiene and sanitation needs of a person and a family.
In the 1990s during the International Decade for Water and Sanitation for Health, the WHO determined that sufficient water for sanitation and hygiene was more important than the overall purity of the water in preventing disease.
In addition to the amount of water that needs to be available, the water has to be accessible within a reasonable amount of time. It has to be relatively close to where workers and their families live, for the time used to bring water is time that cannot be used for work, study or other activities. This factor must also be considered when examining the PPI standards for water written below.
Realistically, in any country, simply ensuring adequate potable water is an enormous task. Water may have to be carried in containers from far distances. Or water may have to be purchased from trucks that deliver the jugs of water…with the buyers at the mercy of the water sellers. Having continuous access to water via pipe and tap when one needs the water is almost unheard of in many parts of the world. The question is how to address a water standard realistically. Added to the issue of physical access is the growing move to privatize water as well as its delivery, often putting it out of the financial as well as physical reach of many who need it.
The components of a water standard are simple: potable water, that is, water that is healthy for drinking and non-potable water that is used for hygiene. Hygiene activities include bathing, washing of clothes, eating and cooking utensils, sanitation and other similar activities.
In 2002, the United Nations adopted water as a human right. This adoption committed the 145 countries that have ratified the International Covenant on Economic, Social and Cultural Rights to work to ensure fair and non-discriminatory access to safe drinking water. The UN Committee on Economic, Social and Cultural Rights declared. The right to water clearly falls within the category of guarantees essential for securing an adequate standard of living, particularly since it is one of the most fundamental conditions for survival.
According to the World Health Organization (WHO), 45 liters per capita per day is the break point where insufficient water will result in a significant and noticeable decrease in infectious disease. Of that amount, approximately 2-4.5 liters per day needs to be potable or drinkable water, with the amount varying according to the person’s activities.
Therefore, CREA has divided the water standard into two sections.
Section 1: Standard for the Sustainable Living Wage or the Sustainable Living Income
Section 2: Standard for the Sustainable Community Wage or Sustainable Living Community Income
Standards for Education Needs
Education is a basic need within any community. Formal schooling provides the students with the skills they need to communicate, to calculate and to create. Access to education has several components. First, a school must be physically accessible. Second, the family needs to be able to pay any required school fees. Even when school is free, there are often school fees that are required. Third, the money to pay for uniforms and school supplies has to be available when these also are required. Fourth, the children, especially the older children, need to be free to attend school. That is, their labor should not be required to meet the struggle for a decent standard of living for the family.
Sustainable Living Wage and/or Sustainable Living Income Standards for Education
For each of the years of compulsory schooling for each school age child, money needs to be available for school fees, school uniforms, school supplies, and transportation to/from school if necessary.
Standards for Health and Healthcare
Defining healthcare standard is a complicated task. In any country, it must start with the most basic requirements of water and food. In previous sections, the standard for food provides for the nutrition that is the foundation for health.
In the water standard, the twin components of potable and non-potable water provide the basic standard for health. The health effects related to sufficient water are numerous. Sufficient water is necessary to prevent dehydration and death. Potable water is necessary to avoid the numerous diseases associated with water contamination. Having sufficient water to wash one’s hands is critical whether after defecating or before preparing food or eating. Accessibility of water supply and the effective use of water for cleanliness are essential for hygiene. Each leads to significant improvements in health even when water is limited.
Purchasing Power Index Standards for Healthcare
Coupled with effects of nutrition and the availability of sufficient and appropriate water, there are a group of everyday items which need to be available. These include common medicines such as aspirin, acetaminophen, ibuprofen and other similar products. These should be available along with common antiseptic and bandages for cuts and other wounds to protect against infection.
Costs associated with vaccinations that provide immunity to common diseases must be possible. These include whatever fees are necessary at the doctor or clinic as well as transportation costs. Additionally, members of the family need to be able to go to the doctor and dentist when necessary. This requires some savings that make these visits possible. Again, transportation must be included. Since it is impossible to know when someone will need to go to the doctor, savings for these times must be possible.
There are traditional treatments for illness in many countries. Markets often include stands or stalls where traditional medicines and pills of many types are available for purchase. Traditional medicine is to be honored for the healing and health purpose it serves. Costs of these treatments must be included.