Deep-dive: living income
In many countries, there is a significant gap between actual income and living income, making it difficult for people to support their families.
What is a living income?
A living income is the income with which people can achieve a decent standard of living. This includes access to food, water, housing, education, healthcare, transportation, clothing, and other essential needs, including supplies for unforeseen events.
A living income is particularly relevant for small-scale farmers in production countries, who often produce multiple crops and raise livestock. Certain crops are cultivated for generating income, while other crops are grown for personal consumption.
Examples of include:
- Coffee farmers
- Cocoa farmers
- Cashew nut farmers
- Rice producers
- Small-scale palm oil producers
- Independent miners
Useful tools
- The ‘living income community of practice’ is a community which supports you in understanding and measuring income gaps. Learnings are also shared on the platform.
- The IDH ‘roadmap on living income’ assists companies with practical tools to bridge the gap between their actual and living income.
Homework assignment
After this assignment, you will have a good overview of which ingredients/raw materials have an actual or potential risk related to a living income.
- In the previous module, you created an Excel file with the key ingredients/raw materials, their origins, and whether child labour is a risk. For this assignment, add another column called living income.
- Examine whether the absence of living incomes can play a role for each ingredient/raw material. Do this using the CSR Risk Checker and relevant sector reports. It may also be helpful to look at what other players in your industry report regarding risks.