Remuneration determines the actual impact of work on improving living conditions. The World Association for Development (AMD) recognises this as a cornerstone of personal autonomy: work only fulfils its true purpose when the income it generates enables people to meet their basic needs, maintain family stability and look to the future with confidence. Access to employment and the possibility of making a decent living from one’s work remain, in this respect, two distinct realities.

Work contributes to the creation of wealth and to community life. Remuneration is one of the means by which this contribution translates into material security and opportunities for empowerment. Analysing it thus sheds light on the relationship between economic progress and social progress.

Remuneration measured against basic needs

The value of an income is measured in terms of the practical realities of daily life. Housing, food, healthcare, transport and education are expenses that households cannot easily do without. Once these costs have been met, the remaining resources determine their ability to save, cope with unforeseen events or undertake a project.

The conclusions adopted by the ILO in 2024 on the living wage establish precisely this link with the needs of workers and their families. They recognise the possibility of achieving a decent standard of living through work carried out during normal working hours, taking national circumstances into account. This benchmark therefore does not set a universal amount: it situates remuneration within its economic and social context.

The time required to earn this income is inseparable from this assessment. Remuneration that is only sufficient at the cost of excessive working hours leaves little room for rest, family life or training. Material security may then be achieved at the expense of other essential aspects of life.

For the self-employed, a further distinction must be made between takings and disposable income. Purchases, business travel and the maintenance of equipment absorb part of the takings. The volume of business therefore does not, on its own, indicate the resources actually retained by the worker.

Why does a rise in wages not guarantee a rise in the standard of living?

Changes in pay only make sense when viewed in relation to price changes. A nominal increase may still result in a loss of purchasing power if essential expenditure rises more rapidly.

The ILO’s Global Wage Report 2024–2025 thus distinguishes between nominal wages and real wages, which are adjusted for inflation. It also examines disparities between regions and pay categories. These distinctions help to explain why an average improvement does not necessarily translate into comparable progress for all workers.

Households have different margins for adjustment. When food and housing already account for the bulk of their resources, a rise in prices may lead them to postpone healthcare, cut back on certain education expenses or take out loans. Financial strain then spills over into other aspects of life.

The predictability of income matters just as much as its level. Irregular payments can destabilise a budget that is otherwise balanced over the course of the year. Rent due dates, bills and school fees continue to fall due, regardless of the pay schedule. Material stability thus depends on a combination of sufficient income and a degree of continuity in payments.

Low incomes restrict people’s independence

When work only covers immediate expenses, choices become limited to the short term. Building up savings, funding a qualification or looking for a more suitable job becomes more difficult. Employment ensures a livelihood without always opening up the prospects usually associated with it.

However, a household’s poverty cannot be deduced solely from the wage of one of its members. It also depends on other resources, the number of dependants and the benefits available. Two workers earning the same wage may therefore find themselves in significantly different situations.

This distinction highlights the importance of taking a close look at living conditions. In its policy statement, the AMD emphasises that employment which keeps a person in poverty cannot fully fulfil its role in empowering them. The contribution of work to development is therefore assessed in terms of the opportunities it actually opens up.

For young people, this issue is particularly relevant to their transition to independence. Low or uncertain pay can prolong dependence on their family, delay access to housing or make further training inaccessible. The conditions of a person’s first job thus influence their ability to prepare for the next stages of their career path.

 

Pay equity and recognition of professional contribution

Pay gaps stem from a variety of factors: responsibilities, qualifications, working hours, sector of activity and career progression. Interpreting these gaps requires consideration of the situations being compared and the mechanisms that produce these differences.

The issue of equity arises in particular when certain groups face greater obstacles in accessing better-paid jobs, having their skills recognised or progressing in their careers. The issue of pay is therefore linked to that of equal treatment and professional recognition.

Collective bargaining is one of the frameworks within which these aspects can be examined. The ILO presents wage-setting as a process that balances the needs of workers and their families with economic factors. Social dialogue makes it possible to weigh up these elements and to make the criteria used explicit.

In São Paulo, Brazil, an initiative documented by the ILO in the domestic work sector illustrates this approach. A collective agreement provides, in particular, for wages above the national minimum and provisions tailored to different forms of employment. This example shows how the realities of a profession can be taken into account when defining its pay conditions.

A direct link between household security and economic development

Income from work supports household consumption, savings and plans. Through these channels, it contributes to business activity and the flow of resources across regions. Its effects therefore extend beyond the mere relationship between a worker and their employer.

For businesses, pay forms part of a broader framework comprising productivity, skills, costs and business prospects. The relationship between wages and economic development is based on these interactions. It requires a simultaneous understanding of human needs and the operating conditions of the productive sector.

Transparency regarding career paths also plays a role. Clear remuneration rules, regular payments and opportunities for progression facilitate decisions that shape the future. This clarity enables people to consider family investments, training or a change in circumstances with greater confidence.

Decent pay thus gives tangible expression to the recognition of work. The World Association for Development regards this as a prerequisite for autonomy and sustainable participation in economic and social life. Progress is achieved when work enables people to move beyond merely coping with immediate needs and to attain a more stable existence and the prospects of their own choosing.

 

Samyath A. AMOUSSA