How large is the global living wage gap and the price increase needed to close it

Bibliographic Data

ID4237597
AuthorsMurray R Hall (0000-0001-9020-2199, University of Queensland, Brisbane, Australia, corresponding author), Sangwon Suh (0000-0003-1014-3075, University of California Santa Barbara, Santa Barbara, CA, USA, corresponding author)
Year2020
Volume18
Issue2
Pages555-574
Publication date2020-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueSocio-Economic Review (JOURNAL)
Journal identifiersISSN: 1475-1461 • E-ISSN: 1475-147X
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/ser/mwy040
OpenAlexW2903335876
LanguageEN
References cited28

We estimated the global living wage gap (LWG) as $US674 billion per year, which is comparable to the gross domestic product (GDP) of Switzerland. India (IND), the largest LWG country, contributed 32% of the global LWG. For a pair of jeans, closing the gap increases low-skilled cotton and textile wages in IND by 137% and 52%, respectively, while the retail price would increase only by 8% if consumed in Western countries. However, we found that most of the outputs with large LWGs from low-income countries are consumed domestically, suggesting that (a) closing the gap significantly increases the domestic price of products such as agriculture and textiles in low-income countries; and that (b) living wage premiums in high-income countries alone have a limited impact on closing the global LWG. The results highlight the need for both ethical trade and domestic living wage initiatives to close global LWGs

Agricultural economics · Agriculture · Business · Closing (real estate) · Developing country · Economic growth · Economics · Geography · Gross domestic product · Labour economics · Living wage · Market economy · Product (mathematics) · Standard of living · Wage · Environmental Impact and Sustainability · Global trade, sustainability, and social impact · Innovation and Socioeconomic Development

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