Understanding wage issues in the tea industry

Publication date: 1 May 2013
Author: Multi-stakeholder project, as part of the Tea Improvement Program (TIP), facilitated by IDH – The Sustainable Trade Initiative

Wage levels are an issue of concern across the globe as individuals, companies and governments wrestle with how wages paid to workers relate to costs of living, corporate and national competitiveness, profi tability and broader macroeconomic trends and challenges.

Reports by civil society organisations, including Oxfam, have highlighted the issue of low wages and excessive working hours in the supply chains of a range of commodities and manufactured items, including tea. They argue that corporate compliance programmes and product certifi cation schemes have achieved only limited reach to the root causes of supply chain problems, including low wages, and many have called for a Living Wage for workers.

While statutory minimum wages are established in 90 per cent of countries, in many cases wages paid to workers fail to comply with these, and where there is compliance, minimum wages may not meet the basic needs of workers and their families. The recent spikes in food prices, highlighted as part of Oxfam’s GROW campaign, have especially hurt those who spend more than 50 per cent of their income on food.

It is in this context that Oxfam and the Ethical Tea Partnership (ETP), a not-for-profit member organization of tea companies committed to improving the lives of tea workers and their environment, initiated a project in 2010 to increase understanding of wages in the tea sector, and to use this as a basis for constructive dialogue in the future, with three objectives:

  1. Developing an evidence-based understanding of what wages are paid in relation to a range of wage benchmarks, including developing and testing a wage ladder tool.
  2. Building a partnership of stakeholders with a common concern to ensure that tea workers’ wages are adequate for sustainable livelihoods.
  3. Identifying obstacles to raising wages.