Higher wages for low-wage workers can improve the environment, according to researchers. The finding raises new possibilities for investors seeking to uphold environmental, social and governance, or ESG, principles.
“Our results challenge much of the well-established conventional wisdom about how we as a global community can combat the twin threats of poverty and climate change,” said lead study author Simon Mair, a research fellow at the University of Surrey’s Centre for Environment and Sustainability, in a press release.
Mair and his colleagues at the University of Surrey studied the effects of paying a living wage to garment industry workers in Brazil, Russia, India and China, or the up-and-coming so-called BRIC countries.
They defined a living wage as enough for the worker to lead a decent but not luxurious lifestyle. In most BRIC countries, a living wage was twice as much as current earnings.
Living wages boosted clothes prices in Western Europe by 12.5 percent, they claimed in the journal Ecological Economics. Employment in the region would also increase if employers offered more pay. But carbon emissions remained the same.
Higher wages would lead to more jobs and less poverty for the same amount of carbon, in other words.
“What we found was that if higher prices in wealthy countries are paying for higher wages in poorer countries you can get a win-win,” Mair said. “People in the rich countries buy less, which means less environmental damage, but people in the poorer countries buy more thanks to their higher wages, which means more jobs.”
Image credit: shankar s. via Flickr