The WFTO Fair Payment Process has been developed to improve the lives of workers, the success of businesses, as well as the knowledge of engaged consumers. To achieve this, the process consists of Fair Prices, Fair Wages and Income plus Local Living Wages. When calculating fair payments, WFTO believes it is essential to focus on on-going dialogue, participation and local context.
Fair Payment tools
The Fair Payment Tools, which consist of the Local Living Wage Calculator, Living Wage Ladder and Local Context Notes, were developed to provide in-depth knowledge of the Fair Payment process. The tools are used together to understand the local living wage in unique geographical contexts. A Living Income tool is available for organisations buying (semi) finished Fair Trade products.
Local Living Wage Calculator
The Local Living Wage Calculator is a tool of transparency that is used to calculate the cost of living. Workers, buyers, and end consumers subsequently all benefit from this transparency. Successful promotion of Fair Trade hinges on our ability to share how the lives of workers are related to the price of products. Rather than relying on outside data sets, loosely calculated from afar, these numbers reflect the specific reality of WFTO Members and the needs of their workers.
Living Wage Ladder
The Local Living Wage Ladder takes a number of Living Wage metrics into account to show how WFTO Members compare to benchmarks set both internally and by other organisations. What are the wages in comparable industries in this location? How do other organisations quantify a living wage in this region? The Living Wage Ladder then depicts these different reference points in a graph to see how the wages WFTO Members pay compare to the other calculations.
Local Context Notes
Local Context Notes allow WFTO Members to quantify how local influences affect their organisation, as well as explaining to external parties the reality on the ground. Some of the factors that as considered include regional unemployment, access to housing, political environment, and substance abuse rates. These are circumstances facing every society, with the lowest wage workers often feeling the greatest effect. WFTO Members are taking the initiative to work with their employees to identify both opportunities and obstacles, and put practices in place to guarantee workers a better, more just, future.
WFTO Members Calculated living wage
WFTO members complete and update the Fair Payments tools every 2 years as part of their Self Assessment Report. Members review costs of living by collecting information on food costs. These food costs are used as the basis and a formula includes all other costs of living such as housing, education, health care, transportation while accommodation for average number of people dependent on one income. We also ask member to review alternative employment wages and what the minimum wage is.