German Retailers Working Group Publishes First Wage Gap Report for Ecuador
The members of the German Retail Working Group on Living Wages ALDI Nord, ALDI South Group, Kaufland, REWE Group and dm-drogerie markt have conducted the first wage gap analysis in the banana sector in Ecuador. The participating producers reported small wage gaps of less than 1 per cent of the workers. This underscores Ecuador's pioneering role in paying living wages in the banana sector. However, a solid verification of the data on the ground remains essential. The working group plans to explore suitable approaches this year. Ecuador serves as an important blueprint for the WG's first project to transfer best practices to other producing countries of the retailers' banana assortment.
Wage Gap Analysis creates Transparency in Living Wage Project in the Banana Sector
The first joint project of the German Retail Working Group aims to promote living wages and decent work in the banana sector. By 2025, each member is to source at least 50% of its total banana volumes for the German market as "Living Wage Banana". Due to complex supply chains, mostly indirect business relationships and the lack of functioning tools to collect and compare wage data, retailers had limited transparency on the wage situation of workers* in their banana supply chains. Therefore, an analysis of prevailing wages and potential living wage gaps was an essential step to create transparency, understand the social risks in the supply chain and find solutions to improve the wage and labour situation of workers.
The working group decided to start its implementation activities in Ecuador because of the country's importance as a sourcing country for the participating retailers as well as for the German market as a whole (15% of German banana imports came from Ecuador in 2020, FAO 2021). Other factors for selection were the sector's strong organisations and progress towards living wages as a result of Ecuador's salario digno policy. In Ecuador, farms are required to comply with the salario digno, which means paying their workers a living wage for a 40-hour week. The lessons learned in Ecuador will serve as a blueprint for transferring best practices to other sourcing countries and commodities in the coming years.
Wage Gap Analysis another Important Milestone of the Project
Conducting a wage analysis is one of the key milestones of the project's roadmap, which serves as a guide for the AG to promote living wages and decent work in the banana sector. Using the IDH Salary Matrix, wages were recorded by the producers themselves in order to compare them with the Living Wage benchmark. The Living Wage is the wage that a worker should receive for a normal working week to ensure a decent standard of living for him/herself and his/her family.