What is the Difference Between Living Income and Living Wage?
The concepts of “living wage” and “living income” are both about achieving a decent standard of living for households. The idea of a living wage, however, is applied in the context of hired workers (in factories, on farms, etc.), whereas living income is discussed in the context of any income earner, such as self-employed farmers.
The Anker Methodology is designed to estimate a living wage, but it can also be applied to living income, as the cost of living for a family is the same regardless of how income is derived. The living income community of practice, which includes several Global Living Wage Coalition members, is currently using the Anker Methodology to estimate living income benchmarks in areas of Cote d’Ivoire and Ghana where cocoa is produced primarily by smallholder farmers.
Definition of Living Income
The living income community of practice has agreed to a definition of living income that aligns with the Global Living Wage Coalition’s definition of living wage:
The net annual income required for a household in a particular place to afford a decent standard of living for all members of that household.
See AlsoGuidance manual on calculating and visualizing income gap to a Living Income Benchmark - KITElements of a decent standard of living include: food, water, housing, education, healthcare, transportation, clothing, and other essential needs including provisions for unexpected events.
Living Income Community of Practice
Aligned with the work of the GLWC, and involving many of its members, is the living income community of practice. The living income community of practice is an alliance of partners dedicated to the vision of thriving, economically stable, rural communities linked to global food and agricultural supply chains. Its goal is to support activities focused on improving smallholder incomes towards living income benchmarks, enabling smallholder farmers to achieve a decent standard of living. This community of practice is a result of a partnership between the The Sustainable Food Lab, GIZ and the ISEAL Alliance.
The specific objectives of the living income community of practice are to:
- Provide methods and guidance on measuring and reporting information on current and living incomes. and help understand the gap between these.
- Identify and discuss strategies to help actors take actions that can contribute to closing income gaps.
For more information on the living income community of practice please visit https://www.living-income.com/
