The third step to addressing living income in your supply chain is to verify your calculations for accuracy and alignment across stakeholders.
Ensure your data points are comparable
When calculating the living income gap, the two main data points are household actual income and the living income benchmark. These must be comparable to ensure consistent contextual factors were used and to ensure the living income gap is accurate.
Check that these figures are comparable and that they cover the same:
- Timeframe (e.g. per month or per year);
- Time period;
- Geographical region;
- Currency; and
- Household size and composition.
An independent third-party verification process would help to improve the accuracy of living income calculations in a uniform way.
Align all stakeholders on gap analysis
Closing living income gaps requires multistakeholder actions, and those actions need to be coordinated and aligned based on a common understanding of the current situation. Thus all stakeholders should be in agreement on the living income gap analysis and assessment of income driver data.
- Engaging other stakeholders and utilizing their data in Steps 1 and 2 can increase efficiency in verifying the calculations across stakeholders; and
- Don’t let perfection get in the way of progress. Document your data and sources, make your analysis as comparable as possible, and take action based on what you know. Make a commitment to use more specific, accurate and/or detailed information as you progress.
- LICOP Guidance manual on calculating and visualizing the income gap to a Living Income Benchmark provides criteria for the comparability of data points
- IMF Consumer Price Index to check time period comparability