Poverty is one of the major sustainability issues itself and the one most influencing other issues. Global population growth, climate, conflict, health and safety conditions, erosion, forest clearing. pollution and many other conditions, all have a strong (positive or negative) relation to the issue of poverty. Every human being has the right to a human worthy life. The primary mechanism of distribution of wealth currently is the remuneration of labour, by which every person should be able to earn a human worthy existence. This standard considers minimum wages as a necessity, but also recognizes that the marketplace determines prices and wages in free competition by the law of demand and supply. However, especially in agriculture and fishery but also in other, mostly labour intensive branches, many small businesses are not able to earn a fair wage by too low prices which they obtain for their products. Therefore this standard includes criteria on fair pay of both wages and products.
The responsible organization considers itself co-responsible for a human worthy existence of its employees and suppliers.
The Oiconomy Standard distinguishes two ways of too low remunerations to enable a person to achieve a human worthy existence: fair payment for labour and fair payment for products.
Regarding labour, income differences are necessary because some talents are scarce, because responsibility and taking of personal risks may be rewarded and because financial rewards represent an important motivation and stimulate initiative and development. Too high rewards however are harmful because they stimulate people, mostly decision takers, to prevalent their own interests over the interest of sustainability. In addition, high incomes are withheld from other people and from the sustainability of the organization and too high wages of top management do not bear witness of respect for employees. The standard bases the preventive costs and ESCU’s on the difference between the local fair wage and lowest pay and the ratio between highest and lowest pay within the company. Lacking a good definition of what is “fair” , a standards will be developed based on the practices of the top 20% (and bottom 20%) HDI countries.
Regarding fair payment for products, the Oiconomy Standard requires a responsible company, buying from small suppliers, to analyse the typical income per hour of the supplier making the relevant product and bases the preventive costs and ESCU’s on the difference between that typical income and the local fair wage.
Other economical issues addressed by the Oiconomy Standard are some evident causes of the financial crisis such as unresponsible financing and risk taking and some common and unfair tax avoidance practices.»» back to parent page Types of unsustainability