Affiliation:
1. University of Queensland, Brisbane, Australia
2. University of California Santa Barbara, Santa Barbara, CA, USA
Abstract
Abstract
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.
Publisher
Oxford University Press (OUP)
Subject
General Economics, Econometrics and Finance,Sociology and Political Science
Cited by
2 articles.
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