Calculating a Living Wage

The Asia Floor Wage Alliance base their calculations on the following assumptions:

  • A worker needs to be able to support themselves and two other “consumption units”. (1 consumption unit = 1 adult or 2 children)
  • An adult requires 3,000 calories a day to be able to carry out physical labour.
  • In Asia food costs account for half of a worker’s monthly expenditure; and non-food for the other half.

The Asia Floor Wage must be earned for a work-week of maximum 48 hours, not including bonuses, allowances or benefits.

The Asia Floor Wage is calculated in PPP$ – Purchasing Power Parity $, which is an imaginary World Bank currency built on the consumption of goods and services by people, allowing standard of living between countries to be compared regardless of the national currency.

Asia Floor Wage is revised periodically by conducting fresh Food basket surveys, and within intervening years by the use of a formulation based on Consumer Price Index.

The 2017 Asia Floor Wage figure is PPP$ 1187

Click here to see how this translates to local currencies.

Living Wage calculations outside of Asia

The Asia Floor Wage calculation cannot be simply applied to other regions as some of the assumptions do not apply.  For example food costs accounting for half of income,  this is the case in Asia where food costs are relatively high and standards of living such as housing are very low, however in other regions such as Eastern Europe food costs are relatively lower when compared to housing.