Living wage

Novartis believes that economic, social and cultural rights - such as the right to an appropriate standard of living that guarantees health and wellbeing for a family, including food, clothing, accommodation and medical care - should be respected in the course of our business activities. Accordingly, we were among the first international companies to develop and implement a voluntary commitment to pay a living wage to all our employees around the world.

A living wage reflects the cost of a certain basket of goods and services considered to cover basic necessities, taking into account the social circumstances and requirements of the environment. It is often higher than the minimum wage in the same country, which is an hourly amount defined by law that employers must pay their workers. Minimum wages, however, are not based on what that wage is able to purchase, or whether those purchases will provide for a family's basic needs to ensure an adequate standard of living.

Novartis considers the living wage initiative an opportunity to contribute to the improvement of labor standards and have a positive impact on communities where the company operates. This is particularly important in developing countries where legal protections for workers may not be as advanced as in industrialized nations.

We commissioned Business for Social Responsibility (BSR) to establish a methodology to calculate annual living wage levels for over 60 locations, then worked in close consultation with local management in countries with divergent economic systems and standards of living. Where and when necessary, Novartis adjusts the salaries in line with living wage levels (93 associates in 2006). We will continue to work with BSR on periodic adjustments to the living wage methodology.

Read more about our living wage initiative in our case study.