Calculation of Fair wage potentials along products' life cycle – Introduction of a new midpoint impact category for social life cycle assessment

Abstract

Income and wages are among the determinant factors for the living standards and well-being of workers and thus carry a certain degree of relevance for social life cycle assessment (SLCA). Although, fair wages have often been mentioned as a quantitative measure of societal well-being, a defined impact category and quantitative characterization model is missing. Against this background, this paper aims at defining Fair wage as a new midpoint impact category for SLCA and suggests a characterization model to calculate fair wage potentials (FWPs) along a product's life cycle. The characterization model considers the actual wage paid at each process step in comparison to a minimum living wage. It furthermore relates wage to the effective working time and includes an inequality factor to account for income inequalities. The characterization model was tested in a cradle-to-gate case study on tomatoes produced in Germany to ensure its applicability. Results indicate potentially negative social impacts for workers employed in packaging and transport in Turkey and workers in manufacturing and packaging in China. In contrast, low impacts resulted for the Indian workers. No negative impacts are expected for the German and Dutch workers. The midpoint category Fair wage and the associated characterization model facilitate the operationalization of social impact assessment and provide companies with a practical method to quantify and evaluate their products' life cycle.