Through collaborative partnerships, local union organizations leveraged data and buyer support for living wages in their negotiations to successfully increase salaries.
Data is key
Spearheaded by the local union, and supported by CNV Internationaal, Nicaragua’s sugar cane industry has achieved significant success in cultivating equitable wage practices and improving conditions for its 35,000 workers. Through collaborative partnerships, local union organizations leveraged data and buyer support for living wages in their negotiations to successfully increase salaries. This case study stands as a testament to the power of collective efforts and data-driven initiatives in creating positive change across supply chains.
Recognizing the importance of data
While local unions can achieve great success through their own leadership and expert local knowledge, they may not have the data at hand needed to identify gaps in progress. With support from CNV Internationaal , existing local unions in Nicaragua understood that data would allow them to be better prepared for wage conversations. Through this process, they also pivoted to understanding that the most vulnerable workers are not protected by unions.
Collecting the data needed for successful negotiations
As part of this initiative, data gathering including monitoring – in the form of surveying all permanent and temporal workers in the sugarcane industry through the Fair Work Monitor developed by CNV Internationaal. The survey asked participants for wage levels, and whether these met the legal minimum wage or benchmark living wage. This was complemented by an economic analysis, which shed light on information about the wider environment, including the profitability data of companies.
Together, this provided the local unions with a powerful position in its collective bargaining. By being better informed, negotiations were more effective, and salaries were successfully increased by between 8% and 12% over the last three years.
100% fair work, that is what CNV internationaal is working for every day in Latin America, Asia and Africa in value chains like palm oil, sugar cane, metals, carbon and textile. We do this by working together closely with local partner trade unions and by investing in good cooperation with other partners, such as companies and governments. Fair work means that people can work safely and in all freedom, earning a living wage. Freedom of Association and social dialogue are important conditions for achieving this.
More information: Fair Work Monitor (cnvinternationaal.nl)
Data-driven systemic change
The collective bargaining resulted in institutionalized salary increases, a greater overall understanding of the issue of living wages, better collaboration between stakeholders and strengthened local unions in their role during wage discussions. In 2021, when wages were measured for the 548 workers, the survey identified three categories: 65% of employees earned below the living wage. 14% of workers earned a living wage and 21% of employees earning above the living wage.
Through the collective bargaining efforts of the local union, backed by the economic study and wage data, workers who were previously earning below the living wage had their wages raised. By 2023, the workforce participating in the monitoring also grew to 876 workers. The percentage of workers who earned below a living wage reduced to 60% of the workforce while the percentage of workers earning a living wage increased to 30%. High earning workers who already earned a living wage tended to exit the workforce, resulting in this group making up 10% of the employees.
Gender committees were also organized as part of the collective bargaining agreement.
This transformative journey has not only empowered local stakeholders but has also attracted interest from broader supply chain actors, such as buyers. The collaboration with CNV Internationaal has highlighted the value of data-driven decision making, shaping positive relationships across the supply chain.
The way ahead
The momentum generated by these accomplishments will propel the industry forward and guide future strategies. The upcoming 2023/2024 harvest provides an opportunity to witness a regional monitoring cycle of the Fair Work Monitor, and Spring 2024 will see intensified efforts in social dialogue and negotiation, reinforcing the commitment to fair wages. The next stage includes utilizing the Salary Matrix and Anker methodology to refine the monitoring process, in addition to conducting an economic study at the sector level to offer even more comprehensive insights.
As Nicaragua’s sugar cane industry continues to evolve, the future holds promise for even greater achievements on the path toward fair and sustainable wages.
Previous publications of this case study have incorrectly mentioned the inclusion of parties that were not part of this work. Please refer to this version for full accuracy.