Aid can’t fix poverty, but a living wage can

This blog also appears in Alliance magazine. 

(L – R): Matthew Bolton, Citizens UK and Katherine Chapman, Living Wage Foundation

The foundation of today’s global economic system, namely the International Monetary Fund and the World Bank Group, was established in 1944 through the Bretton Woods Agreement. Both agencies were initially tasked with regulating the international monetary system and rebuilding countries devastated during World War II. Their current mission is to “promote macroeconomic and financial sustainability” and to “boost shared prosperity on a livable planet.” Eighty years on from the Agreement, global government debt is on course to hit 100% of GDP by 2029 and the world’s poorest countries “face the worst debt crisis since global records began.” It’s time for a rethink – could a global living wage be the answer?

The state of working poverty

Over a billion people worldwide are trapped in working poverty, earning less than they need to afford a decent standard of living. This means that for a third of the global workforce, having a job holds no guarantee of being able to afford the basics. Workers and their families are struggling to survive, often unable to put food on the table or keep a roof over their heads. Pressure mounts as the cost of living continues to rise and economies flounder.

Against the backdrop of multiple global crises and deepening inequality, trust in our political systems has fallen to a record low. As we consider the risks of an increasingly divided society, a new, people-centred movement that transcends borders is emerging. One that could unlock the drastic change that is so desperately needed if we are to shift away from the dangerous path on which we find ourselves. The movement for a real living wage is taking root around the world, and its potential for social and economic transformation is profound.

Global development is not working

We are all keenly aware of the impact of reduced aid budgets and loss of public backing for foreign aid in favour of focus on domestic priorities. While governments around the world continue to embrace isolation, the global development organizations they support consider their own survival. Lifting vulnerable communities out of poverty remains the core mission of many INGOs tasked with allocating resources and delivering impact where it’s needed most. Corporate social responsibility (CSR) leads continue to support social and environmental sustainability programmes. But how sustainable can these efforts really be when funding is mostly restricted and requires detailed evidence of short-term impact?

Scrutiny of external agencies in countries where local participation and leadership is missing has also intensified. Campaigns like #ShiftThePower turned popular terms like “localization” and “co-creation” into a call to action across the global development space to correct power imbalances baked into its operating model.

A new framework for shared prosperity

Those who already understand the connection to localization and how this actually works in practice are calling for global decision-makers to join the living wage movement. And the call is being heard.

Through its Forward, Faster initiative, the UN Global Compact identifies living wage as one of five key areas central to achieving the Sustainable Development Goals (SDGs). It champions the International Labour Organization’s principles, which repeatedly highlight the need for national and local ownership of living wage, as opposed to top-down approaches. Collaboration between workers, businesses and civil society is fundamental throughout. These efforts are backed by the Business Commission to Tackle Inequality, which found that closing the living wage gap worldwide could generate an additional $4.56 trillion every year.

Community leadership on living wage

The challenge of building bridges between local communities globally is daunting by any measure, especially in the current political context. But fair pay is a common goal for all, and everyday people are already making real change by choosing connection over division.

In Bangladesh, leaders like Kalpona Akter highlight the link between living wage, gender equality and human rights. Akter began working life at the age of 12 in a garment factory, where she earned just $6 per month for over 400 hours’ work. Since 2000 she has devoted herself to organizing for better pay and working conditions in the textile and garment industry, where women make up 80% of the workforce.

In Mexico, a coalition of civil society groups  and industry associations operating under the banner of Vida Digna are backing better business through living wage. In the Philippines – one of very few countries that reference a living wage in its constitution – faith groups and workers’ unions are in dialogue with businesses to agree the best way forward.

In the UK, the living wage movement was sparked by cleaners like Abdul Durrant, working night shifts at the towering offices of banks in East London. After long hours of unseen work, Abdul found himself standing in front of the bank’s Chairman at the company’s AGM. He described, simply and powerfully, how they shared an office but led vastly different lives as he struggled to bring up his family on the minimum wage. When he asked whether the people who kept the building running deserved to earn enough to live on, the room fell silent.

In that moment, Abdul’s voice cut through the corporate machinery and reached the heart of the matter: dignity. A single worker, speaking truth to power. And the bank was one of the first to accredit with the Living Wage Foundation as a Living Wage Employer. Today, having delivered over £4 billion in pay rises for almost half a million UK workers, the living wage movement has become a national phenomenon.

Collaboration is key

But the movement didn’t grow from one voice alone. It was built by The East London Citizens Organisation (founding chapter of Citizens UK). By communities organizing from someone’s front room in Wapping in the ‘90s, and it was rooted in the needs and demands of local people in East London. A movement driven by workers finding courage together, by local leaders, businesses, funders and policy-makers who chose to back dignity through decent pay. Every funder who took a risk on community organizing in a new city. Every CEO who convinced their board that valuing workers wasn’t just ethical, it was business smart. Every policy-maker who helped change the rules to make their contracting fairer, regardless of political affiliation.

The global living wage movement is growing

Similar organizing efforts have taken hold in Canada, where living wage accreditation schemes have been established in a number of provinces (including Alberta, British Columbia and Ontario), and progress is underway to scale up nationally. In the US, where over half of working Americans earn less than a living wage and the supply chains of multinational businesses operate across a wide range of countries, Living Wage for US is driving change on decent pay. In New Zealand, the entire banking sector has been lifted on to a living wage, and the movement is making further headway through focus on public procurement. Communities in Hong Kong, India, Singapore, South Africa and beyond are all organizing for change, building power from the ground up to create lasting impact.

Rebuilding trust in democracy

The path to a living wage is just as valuable as the end destination. Community organizing strengthens the institutions and communities that sustain a real living wage over time. Those same institutions are needed at the negotiating table to drive change on any number of other issues. The process itself builds trust across difference and unites all involved around common goals. We might organize for a living wage today and find ourselves united against far-right authoritarianism tomorrow.

Invest in a new paradigm

But while momentum continues to build, a stark truth remains: a real living wage requires real investment. With the ongoing breakdown of traditional funding structures, grassroots organizers continue to struggle despite knowing that what they do works. We already have the answers. What we need now is the collective courage to walk a new path together, with a sense of hope and curiosity instead of fear in the face of deep uncertainty that lies ahead.

This is not just a campaign. It’s a growing global movement, rooted in local leadership and grounded in the belief that work should work for everyone. This movement belongs to all of us – and perhaps to you too.

By: Matthew Bolton and Katherine Chapman. Matthew is the Chief Executive and Lead Organiser of Citizens UK, with over 20 years’ experience in community organizing for social change and democratic renewal. He led the UK Living Wage campaign, is the author of How to Resist, and has championed innovative community sponsorship schemes for refugees. Katherine is the Executive Director of the Living Wage Foundation, with 20 years’ experience working alongside industry leaders and policy-makers to promote high-quality employment for all. Katherine serves as a trustee of the Good Business Charter and as a Commissioner for the Business Commission to Tackle Inequality at the World Business Council for Sustainable Development (WBCSD).