Living Wage, Living Income and Fair Price Further Explained

Abstract

Here, we will take a closer look at the practical implications of three important concepts:

• For Wage earners: Living Wage

• For Farmers: Living Income

• For All: Fair Producer Prices

In the preceding chapters, definitions are given of Living Wages and Living Income. In order to calculate a Living Income for a farmer, we take the Living Wage multiplied by the number of adult household workers. To this, an additional percentage is added to enable for investments to improve future yields.

A ‘Fair’ Price is the minimum price the producer should receive in order to cover all production costs (fixed and variable costs) and be able to pay Fair Wages to all his/her workers on this product and himself/herself. It should also allow the producer to make necessary investments. In the case of agriculture, it should provide at least a ‘Living Income’ for the farmer.