The agreement reflects the ongoing effort to advance social justice and economic development globally, recognising the integral role of decent wages in promoting social development, reducing poverty, and addressing wage disparities.

The agreed definition of a living wage underscores the necessity of wages that enable a decent standard of living. This acknowledges the varied living costs and economic conditions across different countries and regions. The agreed-upon principles for estimating living wages—evidence-based methodologies, stakeholder consultations, transparency, and the acknowledgement of local contexts—set a robust framework for implementing this concept fairly and realistically.

This comprehensive strategy recognises the complexity of achieving living wages and the importance of a multi-faceted approach that addresses underlying economic and social factors.

It calls for a collaborative approach, involving workers and employers in the conversation about fair compensation for creating wage-setting mechanisms that are not only in line with ILO principles but are also adaptable to the changing economic landscapes and living costs.

This perspective is vital for ensuring that wage policies are sustainable and effective in promoting the welfare of workers and their families without imposing undue burdens on businesses.

The International Organisation of Employers (IOE) has strongly supported the consensus on living wages, appreciating the balanced approach adopted that ensures that living wage calculations are fair, reflective of national circumstances, and grounded in data and statistics. IOE also highlights the importance of conducting wage-setting processes within a national framework to accommodate local realities and stresses the necessity of proper governance, urging all stakeholders to adhere to the ILO’s principles and methodologies for a coherent implementation of living wage policies.