8 October, 2018

How much money do you need to live a decent life?

Cocoa Farmer
by Heather Nicholson

In the UK, the national minimum wage in 2018 is set to £7.83 per hour. Daily life, however, is much more expensive than a minimum wage can realistically cover.

People living on the minimum wage suffer a shortfall equivalent to more than six months’ food and drink bill for an average household or almost three months’ worth of average rental payments.

Over 4,400 employers in the UK, including the Fairtrade Foundation, have chosen to pay at least the ‘Living Wage’ as defined by the Living Wage Foundation. The Living Wage is set at £8.75 or £10.20 for Greater London. It’s an amount that lets people live with dignity, afford the basics, the bills and to put away a little in savings.

What’s the difference: Living Wage vs Living Income

A living wage is a salary paid by an employer to a worker that covers a basic standard of life. A company who commits to Fairtrade’s Textile Standards must work towards giving every cotton worker a living wage within six years of starting the scheme.

But if you’re a smallholder farmer, there’s no one to pay you a salary and there are a lot of other factors that come in to play. That’s where the concept of a living income becomes useful.

A living income (defined by The Living Income Community of Practice) is calculated as the net annual income needed for a household to afford a decent standard of living for all members of that household. That means you need to earn enough to eat nutritiously throughout the year, drink safe water and access healthcare. This would also allow you to send your children to school, live in a decent home, save for unexpected setbacks and allow the elderly to retire with dignity.

Farmers’ income often comes from multiple sources such as crop sales, farm business and remittances. To work out whether a farmer achieves a decent living, all of these sources of money are combined and checked against a living income benchmark price. Many of the farmers who grow our food don’t come close to earning a living income. It’s clear that there is a lot of work to do and many industry players to convince.

All farmers deserve to earn a decent living and we are committed to making living income a reality. Find out more about our living income campaign and what you can do to get involved.

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