Tools on Living Income and Wages

The "Tools on living income and wages" section provides resources and tools aimed at helping businesses and policymakers close income gaps for smallholder farmers and workers within supply chains. It includes practical guides and cost estimation tools that support the calculation of fair prices and wages necessary to achieve a sustainable, living income across various agricultural sectors.

GIZ Living Income Reference Price Estimator
Leitfäden Living Income

If at least some workers on a farm or plantation do not receive a living wage, there are various ways to close the gap between the actual wage paid and a living wage: Strong trade unions and workers' representatives are an important lever to work towards improved wage and working conditions in the long term within the framework of collective agreements. Companies can also make a proactive contribution through their procurement practices and reward producers for high wage and labour standards. For example, through an additional price premium to cover the extra costs of paying living wages.

The GIZ Living Wage Costing Tool offers various simulations to analyse the direct cost implications for producers to pay workers a living wage. Different scenarios take into account the existing wage structures, i.e. differences in the remuneration of different activities on a plantation or farm. The cost implications of the respective scenarios and changes in the wage structure are clearly presented and can be compared with each other.

The data basis for the analysis is the idh Salary Matrix. The completed Excel file is to be uploaded into the costing tool. Information on living wage benchmarks and salary data is automatically transferred to the tool.

The tool contains a brief instruction for use on the first page. A training video will follow shortly for a detailed explanation of the tool's use and functions.

The digital version of the GIZ Living Wage Costing Tool is based on version 5 of the Excel Costing Tool and includes the following features:

User-friendly transfer of data from the idh Salary Matrix via an upload function
Choice between two scenarios:

1. Calculation of the additional costs of closing the gap by raising all wage categories below a living wage to a living wage

2. Calculation of the additional costs of job category specific wage increases to enable job and gender specific interventions

Detailed guidance on the different scenarios
Choosing the allocation of the additional costs to the different wage categories (base wage, bonuses and in-kind benefits)
Calculation of the costs for a specific buyer
Improved presentation of the results

The GIZ Costing Tool [CL1] and Training videos are available in English and Spanish.

GIZ aims to continuously improve and expand the tool. If you have any questions or feedback, please contact us at sasi@giz.de.

The copyright is held by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

Developer: Nicola Nuecken, Tim K. Loos and Till Ludwig

To GIZ Costing Tool

GIZ Costing Tool

GIZ Living Income Reference

About the tool

The German Act on Corporate Due Diligence in Supply Chains identifies responsible procurement and buying practices by companies as a key factor in counteracting human rights risks. This includes, among other things, the payment of fair prices and premiums that enable a life in dignity.

But how big is the gap between actual incomes and various national and international benchmarks, such as a minimum income or a living income? What is a fair price?

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The Living Income Reference Price Estimator developed by GIZ is designed to help companies and other users answer exactly these questions. The tool enables the calculation of reference prices in up to 3 different production scenarios at once. Thus it serves to estimate the price required to achieve various income benchmarks such as living income under different conditions.

The data basis of the tool is the ALIGN database, which contains different national and international poverty benchmarks that are retrieved and updated for different countries and regions on a regular basis. For its analysis the tool requires information on the household composition as well as aggregated annual gross margin data. A short manual can be found on the first page of the tool.

Since the beginning of 2022, the tool is being used and tested in pilot measures of various projects. Based on the learnings gained, it will be continuously improved.

This is the first version of the GIZ Living Reference Price Estimator. Please make sure that you save the excel file in a secure folder, as macros are used. If you have any problems, please contact your company's IT department.

Improvements and additions to the tool are planned. Please contact us for questions or feedback at johanna.deckers@giz.de.

The copyright is held by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

Developer: Tim K. Loos and Nicola Nuecken

Living Income Toolkits

Toolkit Living Income for companies

Publisher: GIZ GmbH

Guiding steps towards living income in the supply chain

This is a guide for companies that want to address the poverty and economic viability of smallholder farmers in their supply chains.

Toolkit Living Income for public policy makers

Publisher: Fairtrade Advocacy Office und Sustainable Food Lab

The Role of Governments in Enabling Living Income in Global Agriculture Value Chain - Guidance for public policy makers

This Toolkit was created as guide for policy-makers interested in providing support to smallholder farmers, in an effort to close the gap between actual incomes and a Living Income in agricultural value chains. The document provides considerations and guidance in relation to both production (supply-side) and consumption (demand-side) public policies.