Collaboration with the Floriculture Sustainability Initiative (FSI) members Hivos, Fairtrade International and FairFlowers/FairPlants enabled the production of research on living wages and wage setting in Ethiopia, Kenya and Tanzania. Aiming to increase awareness among supply chain actors on this topic, identify gaps between current and living wages, and stimulate the development of different approaches that can be adopted for measuring progress on this difficult and complex subject.
The program aimed to produce living wage benchmarks studies for Kenya, Ethiopia and Tanzania that could be used for wage negotiations in the future. National and international stakeholders were involved during the studies for identifying the specific cost of living for the main flowers producing hubs in the three countries. The project also conducted an analysis of the different political and social characteristics of the three countries to inform and guide the project partners on which approaches could be developed for working towards the payment of living wages.
Most flower farms in East Africa, which are the main exporters of fresh cut flowers to Europe, are close to major international airports (for export purposes) and clustered close to large lakes (because of a need of a steady supply of water). Unlike most other agricultural products, flower farm workers therefore migrated to and live in areas that have become urbanized since the flowers business and other export-oriented actives have developed.
The fresh cut flower industry is an important sector for creating employment and development possibilities, especially because it provides relatively steady employment year around due to continuous production. Despite wage increases over time, flower farm workers’ wages are still low and in some cases when there are no collective agreements or minimum wages, wages can fall below poverty lines.
IDH is a strategic partner of the project and co-funded around 30% of the activities of the project.
The living wages issue emerged as one of the key topics in the Floriculture Sustainability Initiative (FSI). When discussing with members, the key challenge that actors along the chain faced was that too many different (and divergent) definitions of what a living wage includes were used by civil society organizations, sustainability standards and other stakeholders. This created confusion among farms owners, producers and buyers. The need of a common and organized approach to define the concept in detail was therefore expressed.
IDH also welcomed the initiative taken by some of the ISEAL members to organize themselves as a working group to align their different approaches around a common living wage definition. The Anker methodology was adopted by the group that was named the Global Living Wage Coalition (GLWC).
In 2014 a project idea was put forward by the FSI members Hivos, Fairtrade International and FairFlowers/FairPlants and after discussing project approaches, IDH decided to co-fund this project. In 2017 an initial FSI member meeting was held on the subject were the results of the studies were discussed among FSI members.
IDH is interested in supporting different approaches to work towards the payment of living wages in different sectors, and in producing and sharing learnings on how companies and the private sector can effectively approach this, often complex, issue with all its partners.
The project was initiated by FSI partners Hivos, Fairtrade International and FairFlowers/FairPlants. The Global Living Wage Coalition (GLWC) has been a key project partner for carrying out the living wage estimates. Ergon Associates provided technical support for the analysis of the socio-economic and political situation, while Hivos collaborated with True Price to explore and monetize the business case for a living wage rose.
- Hivos engaged stakeholders in the Living-wage Lab in the Netherlands since 2015. The number of people and companies attending them has increased over time and has reached around 30 sector stakeholders meeting around 3 times a year to discuss the issue and work collectively towards possible solutions and how to take leadership.
- Ergon Associates completed the research on wage structures in Ethiopia and Kenya in 2015. The findings were used by project partners to develop their approaches on how to work towards the payment of living wages in the region.
- True Price published their report where they propose a living wage payment for Kenya on top of normal negotiation.
- The living wage study for the rural Kenya was published in October 2016 and validation sessions were held with relevant stakeholders from the flower industry and beyond.
- The living wage study for the Ziway area in Ethiopia was published in April 2017. Meetings with certified farms, civil society organization and relevant stakeholders were held in the country.
- In 2017, the project partner Fairtrade International introduced a wage approach called the ‘Floor Wage’ for floriculture. Fairtrade applied the World Bank absolute poverty line of US$ 1.90 corrected for purchasing power parity, related to typical family size and number of wage earners to create a minimum requirement for base wages. The Floor Wage for floriculture is approximately 80% higher than current entry-level base wages in Ethiopia (1500 vs. 800 Birr). Fairtrade allows a transition period for already certified plantations of 2 years, whereby 85% of the floor needs to be reached after year 1. The Floor Wage is also meant to help level the playing field between Ethiopian and Kenyan producers.
- Fairtrade flower farms in East African countries have agreed to raise wages (>40,000 workers) in 2018 when these are lower than the new Fairtrade Floor Wage. All Fairtrade farms have adopted this first step and currently are taking next steps identifying business cases towards increasing wages as part of the supply chain margin and price setting.
- Hivos and Fairtrade are cooperating with the leading breeders of Poinsettia to start up practical pilots to showcase the possibilities of working towards the payment of living wages and are implementing this in their supply chain.
- FSI is continuing the discussions with its members on the topic and living wages will be also one of the focus themes in the draft Dutch Responsible Business Conduct Agreement as part of the OECD and UNGP guidelines.
- IDH is interested in supporting partners willing to test different approaches for the payment of living wages, and in sharing learnings on how the private sector can effectively approach this issue within their supply chain.
Living Wage Benchmark Report - Ethiopia
Living Wage Benchmark Report - Rural Kenya
Living Wage Benchmark Report - Semi-urban Kenya
True Price analysis on payment of a living wage in Kenya
Ergon Associate Wage Study on Floriculture in Ethiopia and Kenya