Closing the Living Wage Gap

At Twinings, we believe that everyone working deserves to be paid a living wage, and we are committed to closing the Living Wage Gap, focusing on the most vulnerable workers in our supply chain.

The Challenge

According to the World Bank, today 689 million people live in extreme poverty, surviving on less than US$1.25 a day. While these numbers have declined considerably over the last few decades, they remain high in South Asia and Sub-Saharan Africa. Due to the COVID-19 pandemic, as well as rising inflation and the effects of the war in Ukraine, the declining trend of people living in extreme poverty will reverse for the first time in a generation. 

The United Nations Universal Declaration of Human Rights, Article 23(3) states that “Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy
of human dignity, and supplemented, if necessary, by other means of social
protection.” But while legal minimum wages are established in 90 per cent of countries, in many places, this is not enough to live on.

What is a “Living Wage”?

A Living wage, according to the Global Living Wage Coalition, is “the remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events”.

But unlike minimum wage, living wages are not set or enforced by governments and often involve complex calculations that need to take into account bonuses and in-kind benefits, such as housing, healthcare,
schooling and subsidised food that might be provided to an employee on top of their basic wage. Living wages are also region-specific (not country-specific) since cost of living may vary between urban and rural areas and different parts of the same country.

The Opportunity for positive change

We are working with IDH – the sustainable trade initiative under their Living Wages Roadmap to assess the living wage gap in our tea supply chain. The tool defines a consistent method that could be used across different industries and supply chains to assess current wages at a site and compare this to a living wage benchmark. We are using this tool to work with tea gardens to gain greater visibility of living wage gaps so that we can jointly create timebound action plans to improve livelihoods. We are also working through our responsible purchasing practices, collaborating with others (ETP, IDH, AIM Progress) and piloting sustainable tailored approaches, in order to create long lasting change so tea workers and their families can have a decent quality of life.

Achieving a living wage remains a highly complex issue and there is no one single solution. Collaboration of all stakeholders across the entire sector, from retailers, brands and producers, to Governments, certification bodies, trade unions and the workers themselves is essential. Twinings will continue to support industry platforms that draw attention to this topic and share learnings and best practices to make living wages a reality.

“A living wage journey can’t progress without understanding the size of the living wage gap in a supply chain. Our Salary Matrix has brought several insights to companies since it requires them to look at their practices with a very structured approach. We believe Twinings is on the right track by deploying the Salary Matrix tool across their sourcing areas. With the tool they will measure living wage gaps in all their tea origins, and they are keen to find solutions together with other supply chain partners to address these gaps.”

Judith Fraats, Senior Program Manager – Tea at IDH the Sustainable Trade