Non-Poverty Wages for Countries Around the World

Recognizing that sweatshop workers are paid wages so low they live in abject poverty unable to provide even the basic necessities for themselves and their families, several cities and states have adopted sweatfree procurement legislation that requires public suppliers to pay workers a non-poverty wage which usually is higher than what workers must be paid legally.

Here you can download a table of 2007-2008 non-poverty wages for countries around the world.  The table calculates wages using the same formula formula adopted by sweatfree cities and states.
(Scroll down to the bottom of the page for links to other wage calculations.)

Non-Poverty Wage Methodology

The non-poverty wage levels in this table are conservative estimates that most likely drastically underestimate true living wages especially in developing countries.

The starting point is the poverty guidelines for a family of three in the United States as determined by the United States Department of Health and Human Services.  For 2005, this guideline is $16,090 (http://aspe.hhs.gov/poverty).  Several cities and states determine United States non-poverty wages as the poverty guideline plus 20% distributed either as health benefits or higher hourly wages.  Thus, the per hour non-poverty wage for the United States when the employer does not provide health benefits is $16,090/2,080 x 1.20, or $9.29, where  2,080 is the number of hours worked in a year at 40 hours per week for 52 weeks.  The U.S. non-poverty wage when the employer does pay health benefits is $7.74/hour with $1.55/hour as health benefits.

To determine the non-poverty wage in another country that has similar purchasing power in that country as the U.S. non-poverty wage has in the United States, we adjust the U.S. non-poverty wage by the ratio of that country's Gross Domestic Product (GDP) per capita to the United States GDP per capita, again following the methodology of cities and states that have adopted sweatfree procurement policies.  The GDP per capita figures come from the CIA's World Factbook (http://www.cia.gov/cia/publications/factbook/index.html).

For example, to determine the non-poverty wage for Bangladesh divide Bangladesh's GDP per capita ($2,000) with the U.S. GDP per capita ($40,100), and then multiply this ratio (0.05) by the U.S. non-poverty wage ($9.29 without health benefits).  The result is that $.46/hour has roughly the same purchasing power in Bangladesh as $9.29/hour in the United States.

The 46 cents/hour non-poverty wage level in Bangladesh is substantially higher than the legal minimum wage, set in 1994 at 930 takas/month for unskilled workers, roughly equivalent to 8 cents/hour.  However, even the 46 cents/hour wage for Bangladesh and other non-poverty wage estimates for other developing countries in this table probably underestimate a true living wage in those countries.  The U.S. figure which serves as the benchmark for other calculations is not very generous; $16,090 for a family of three, or even that figure plus 20% is far below U.S. living wages in most regions as determined by living wage studies that take into account geographically specific data on expenditures (food, housing, health care, transportation, child care, etc.).  These figures range from around $8/hour for a single person with a child to more than $20/hour for two workers and two children (see http://www.epi.org/content.cfm/issueguides_poverty_poverty).

Furthermore, the GDP per capita ratio is not always an accurate reflection of relative economic wellbeing.  According to our formula, if the United States generates more millionaires our GDP per capita will increase without necessarily increasing the U.S. poverty guidelines, thus decreasing non-poverty wage levels in countries that do not also increase their GDP per capita ratio.  But there is no reason non-poverty wages in other countries should decrease because there are more millionaires in the United States.

How to Use the Table

The wage figures in the table are by no means accurate measures of living wages or appropriate wages for workers; geographically specific living wages studies should determine the former, while workers themselves, through collective bargaining, should determine the latter. Nevertheless, these conservative non-poverty wage estimates are in most cases substantially higher than what workers in the global apparel industry actually receive even if they are paid the legal minimum wage.  Thus, we recommend that sweatfree activists use the table to:

  • Convince local policy makers that workers should be paid more than just the legal minimum wage in most countries.  It is always helpful to present concrete figures when lobbying for a non-poverty wage standard.  The wage levels in the non-poverty wage table are absolute minimums.  To generate slightly higher non-poverty wage levels simply base the calculations on the United States Department of Health and Human Services poverty guidelines for a family of four ($19,350 in 2005), rather than a family of three, and add 30%, rather than 20%, to that figure.  (Keep in mind that you are eligible for food stamps in the United States if you earn 130% of the poverty guidelines).
  • Check that companies that submit bids under your sweatfree procurement rules actually do pay non-poverty wages, and not just legal minimum or prevailing wages.  When companies are required to pay workers non-poverty wages they should publicly disclose the wages they actually pay in the factories that will produce for your institution.  Assuming that company wage disclosures are accurate, this table provides a quick and easy reference point for determining whether or not companies comply with the non-poverty wage rules.
  • Let unions and workers in producing areas know that your city or state requires payment of non-poverty wages at least as high as those in this table.  If factories have significant contracts with public institutions that require non-poverty wages, workers can use the table to drive a tougher bargain for higher wages.

More resources

Wages

World of Good's Fair Wage Guide 

International Labor Organization's minimum wage database

WRC Research:
Living Wage Estimates: Indonesia and El Salvador
Labor Cost Increases and Apparel Retail Prices

Country Reports on Human Rights

U.S. State Department country reports