Closing the Living Wage Gap 2022 – 2025

The research is targeted to the baseline phase of a four-year research effort to explore the living wage (LW) approach set out in the 2020 Rainforest Alliance (RA) Sustainable Agriculture Standard. The new standard requires that all workers receive at least the minimum wage in their country and are afforded all the protections under ILO Conventions and Recommendations. More importantly, certificate holders (CHs) are obliged to use a Salary Matrix Tool (SMT) to measure the gap to a living wage and, if there is a gap, develop a wage improvement plan with a specific timeline and targets in consultation with workers’ representatives to reach (at least) the level of a living wage.

Through this process, Supply Chain Actors (SCAs) gain insights on the living wage gap and are enabled to take into account the wage improvement plans of the producers they purchase from. They may be incentivised to contribute financially to the achievement of these plans. The process also strengthens the voice of workers with respect to the living wage, including through fostering new forms of worker representation where these do not exist.

The intended effect of these mechanisms is that downstream value chain actors and consumers will pay an additional premium on certified produce, complementing the current mandatory RA Sustainability differential. The theory of change suggests that the CH will receive a better price from the SCA, such as the processing industry, brands and retail, for their product, which the CH transfers to the workers as wage improvement.

The research seeks to capture the dynamics and intended and unintended consequences of the roll-out of the requirements related to the SMT and wage improvement plans. The study will focus on the CHs and their local immediate social embedding, with respect to their employees and also their buyers. The first goal of the study is to gain insight into the modalities and effectiveness for the CH of including worker representation in creating a wage improvement plan. The second goal of this study is to test the theory that RA’s approach to LW will result in credible data that increases transparency across the supply chain. An important assumption is that when the CH uses the data to communicate with buyers (SCAs), the latter are induced to contribute financially to address the living wage gap.