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Concept of living wage and cost of living

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The International Labour Organisation (ILO) now defines a living wage as the wage level necessary for workers and their families to afford a decent standard of living, given national circumstances, for normal hours of work. This standard of living is operationalised through the cost of essential goods and services, typically including food, housing, healthcare, education, transport, and a modest allowance for contingencies and social participation.

In contrast, “cost of living” in economics is a broader price index concept that tracks the overall prices of a representative consumption basket but is not inherently normative about what constitutes decency or dignity.

Living wage methodologies effectively translate a cost-of-living basket, specified for a given family size and living standard, into a monthly income requirement for workers, thereby linking real wages to human development objectives rather than only to market productivity.

Methodologies for computing a living wage

Most contemporary living wage estimates follow a structured “cost of a basic but decent life” approach built around three steps: defining a reference family, costing a normative consumption basket, and converting that cost into a wage per worker.

The Anker methodology, widely used in global supply chains and in Sri Lanka, is a leading example: it defines a model family (e.g., 2 adults and approximately 2–3 children), estimates the cost of a low-cost nutritious diet, adequate housing, and non-food essentials, and then allocates that cost over expected number of full-time workers per family.

Within the Anker framework, the food component is based on locally appropriate diets meeting caloric and nutritional norms, priced using local market surveys and adjusted for waste and home preparation.

Housing costs are derived from standards for minimally acceptable housing (e.g., durable materials, sufficient space, basic services), using rents or imputed rental values from empirical fieldwork. Other essential expenditures, health, education, transport, clothing, and a small margin for unexpected events, are typically estimated as a percentage mark-up over food and housing costs, derived from national household survey data.

Finally, the methodology sets a reference number of workers per family, divides total family living costs by this number to get a net living wage, and then adjusts to a gross living wage by adding payroll taxes and mandatory deductions. Periodic updates are made using consumer price indices (CPIs) to reflect inflation or deflation and, where necessary, new field surveys to capture structural shifts in prices and consumption patterns.

Sri Lanka’s living wage estimates and their link to cost of living (Anker Methodology)

Sri Lanka has been the subject of several living wage studies, notably for the tea estate sector and for urban and rural areas, using the Anker methodology.

In the tea estate sector, an updated 2024 Anker report estimates the cost of a “basic but decent” standard of living for a typical family at about LKR 78,067 per month (approximately USD 260), implying a gross living wage of LKR 48,584 per month (USD 160) and a net, take-home living wage of LKR 44,357.

For urban Sri Lanka, the Anker Living Wage Reference Value was originally set at LKR 84,231 per month in April 2022, corresponding to a net living wage of LKR 77,492 plus social security contributions. After cumulative inflation of about 36.9 percent between April 2022 and June 2025, the updated gross urban living wage is estimated at approximately LKR 115,291 per month (around USD 385), consisting of a net living wage of LKR 106,068 and social security contributions of LKR 9,223

These Sri Lankan figures are explicitly derived from cost-of-living calculations: they incorporate the cost of food, housing, utilities, health, education, and other essentials at local prices and then convert these into wages per adult worker, assuming roughly 1.7–1.8 full-time earners per family. Because living wage estimates are indexed to actual price dynamics, periods of high inflation, as Sri Lanka experienced in 2022–2023, translate almost mechanically into sharp upward revisions in living wages, underlining the tight coupling between living wage levels and the evolving cost of living.

Comparative living wages: Sri Lanka and other countries

Cross-country comparisons require careful normalisation because living wages reflect local prices, family structures, and social norms, but several datasets provide a structured basis for comparison. [asia.floorwage](https://asia.floorwage.org/living-wage/calculating-a-living-wage/)

The Asia Floor Wage Alliance, for example, publishes a regional living wage benchmark expressed in purchasing power parity (PPP) terms, with a 2024 benchmark of 1,750.54 PPP dollars per month converted into local currencies using country-specific PPP exchange rates.

Using this PPP-based approach, the 2024 living wage equivalent for Sri Lanka is estimated at around LKR 158,353 per month, assuming a PPP exchange rate of about 90.5 Sri Lankan rupees per PPP dollar.

This PPP-normalised figure is substantially higher than the Anker 2024–2025 estate-sector and urban living wage estimates in nominal rupees, partly because the Asia Floor Wage benchmark is set to ensure a more harmonised standard across Asian garment-producing economies and uses a single PPP wage target.

These figures indicate that, within this PPP-based framework, Sri Lanka’s living wage in local currency is relatively high compared to countries such as India and Bangladesh, but the comparison reflects both different PPP exchange rates and domestic price structures.

From a cost-of-living perspective, this pattern is consistent with Sri Lanka being a lower-middle-income country with relatively higher prices for some essentials compared with low-income South Asian economies, especially after recent macroeconomic and inflationary shocks.

Global patterns and high-income economies

Global datasets covering more than 200 countries show that typical-family living wage levels, whether calculated in PPP or nominal terms, tend to correlate positively with national income levels, with North America, Western Europe, and Australia displaying the highest living wage values.

In this global distribution, living wages in middle- and low-income regions of Asia, Africa, and Latin America are lower in absolute terms, though the ratio of living wage to median wages or statutory minimum wages can be high, underscoring the gap between decent-work standards and prevailing labour market outcomes.

Interestingly, some studies note that rural living wage estimates can be relatively high in poorer countries because limited infrastructure and service availability raise the cost of accessing a given standard of living, such as safe water, transport, and education.

For Sri Lanka, rural Anker living wage benchmarks similarly reveal the importance of non-food costs, such as transportation to schools, health facilities, and workplaces, in shaping the total family budget, despite lower nominal rents in many rural areas.

Living wage, social policy, and Sri Lanka’s development trajectory

The emerging international consensus around a living wage is rooted in the human rights-based notion of a “decent life” rather than a subsistence minimum or an arbitrarily set statutory floor.

From a social science perspective, incorporating living wage benchmarks into wage-setting institutions, collective bargaining, and social dialogue reorients labour markets toward social reproduction, intergenerational mobility, and social cohesion, rather than merely cost competitiveness.

For Sri Lanka, where recent crises have eroded real wages and increased household vulnerability, living wage estimates such as the Anker urban and estate-sector benchmarks provide an analytically rigorous yardstick for evaluating whether current wage policies and social transfers are adequate relative to the actual cost of a basic but decent life.

Comparisons with regional PPP-based benchmarks like the Asia Floor Wage suggest that, while Sri Lanka’s living wage requirement in local currency is relatively high, the country also faces significant affordability challenges, especially for low-paid workers in export sectors and informal employment, whose earnings often fall short of these normative thresholds.

In policy terms, the living wage framework highlights the need for coordinated approaches that combine wage-setting reforms, inflation-sensitive social protection, and productivity-enhancing investments, so that rising living-cost-consistent wages do not simply translate into inflationary spirals or employment losses.

For empirical research in Sri Lanka, these benchmarks open avenues for micro-level analysis of wage gaps, household coping strategies, gendered labour outcomes, and the distributional effects of macroeconomic adjustment, all anchored to a transparent and internationally recognised living wage methodology.

(The writer, a senior Chartered Accountant and professional banker, is Professor at SLIIT, Malabe. The views and opinions expressed in this article are personal.)



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Trump-Xi meet more about economics rather than politics

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President Donald Trump meets President Xi Jinping in Beijing: Mutually beneficial ties aimed at. (CNN)

The fact that some of the US’ topmost figures in business, such as Tesla chief Elon Musk and major US chipmaker Jensen Huang of NVIDIA fame, occupied as nearly a prominent a position as President Donald Trump at the recent ‘historic and landmark’ visit by the latter to China underscores the continuing vital importance of business in US-China ties. Business seemed to outweigh politics to a considerable degree in importance during the visit although the political dimension in US-China ties appeared to be more ‘headline grabbing’.

To be sure, the political dimension cannot be downplayed. For very good reason China could be seen as holding the power balance somewhat evenly between East and West. The international politics commentator couldn’t be seen as overstating the case if he takes the position that China could exercise substantial influence over the East currently; that is Russia and Iran, in the main. The latter powers hold the key in the Eastern hemisphere to shaping international politics in the direction of further war or of influencing it towards a measure of peace.

For example, time and again China has prevented the West from ‘having its own way’, so to speak, in the UN Security Council, for instance, in respect of the ongoing conflicts involving Russia and Iran, by way of abstaining from voting or by vetoing declarations that it sees as deleterious. That is, China has been what could be seen as a ‘moderating influence’ in international politics thus far. It has helped to keep the power balance somewhat intact between East and West.

At present a meet is ongoing between Chinese President Xi Jinping and Russian President Vladimir Putin in Beijing. This happened almost immediately after the Trump visit. Apparently, Beijing is in an effort to project itself as treating the US and Russia even-handedly while underscoring that it is no ‘special friend’ of the US or the West.

This effort at adopting a non-partisan stance on contentious questions in international politics is also seen in Beijing’s policy position on the Hormuz tangle and issues growing out of it. The Chinese authorities are quoted as saying in this regard, for instance, that China is for ‘a comprehensive and lasting ceasefire in the Middle East’.

Such a position has the effect of enhancing the perception that China is even-handed in its handling of divisive foreign policy posers. It is not openly anti-West nor is it weighing in with Iran and other Eastern actors that are opposed to the West in the West Asian theatre. A ‘comprehensive and lasting ceasefire’ implies that a solution needs to be arrived at that would be seen as fair by all quarters concerned.

On the highly sensitive Taiwan issue, President Xi was comparatively forthright during the Trump visit, but here too it was plain to see that Beijing was not intent on introducing a jarring, discordant note into the ongoing, largely cordial discussions with Washington. On the Taiwan question President Xi was quoted saying: ‘If mishandled, the two nations could collide even come into conflict.’ In other words, the US was cautioned that China’s interests need to be always borne in mind in its handling of the Taiwan issue.

The cautioning had the desired result because Trump in turn had reportedly conveyed to Taiwan that the latter’s concerns on the matter of independence had to be handled discreetly. He had told Taiwan plainly not to declare ‘independence.’

Accordingly, neither the US nor China had said or done anything that would have made either party lose face during their interaction. Apparently, both sides were sensitive to each others’ larger or national interests. And the economic interests of both powers were foremost among the latter considerations.

There is no glossing over or ignoring economic interests in the furtherance of ties between states. They are primal shaping forces of foreign policies and the fact that ‘economics drives politics’ is most apparent in US-China ties. That is, economic survival is fundamental.

Among the more memorable quotes from President Xi during the interaction, which also included US business leaders, was the following: ‘China’s doors will be open wider’ and US firms would have ‘broader prospects in the Chinese market.’

Xi went on to say that the sides had agreed to a ‘new positioning for ties’ based on ‘constructive strategic stability’. The implication here is that both sides would do well not to undermine existing, mutually beneficial economic relations in view of the wider national interests of both powers that are served by a continuation of these economic ties. That is, the way forward, in the words of the Chinese authorities, is ‘win-win cooperation.’

It is the above pronouncements by the Chinese authorities that probably led President Trump to gush that the talks were ‘very successful’ and of ‘historic and landmark’ importance. Such sentiments should only be expected of a billionaire US President, bent on economic empire-building.

One of the most important deals that were put through reportedly during the interaction was a Chinese agreement to buy some 200 Boeing jets and a ‘potential commitment to buy an additional 750 planes.’ However, details were not forthcoming on other business deals that may have been hatched.

Accordingly, from the viewpoint of the protagonists the talks went off well and the chances are that the sides would stand to gain substantially from unruffled future economic ties. However, there was no mention of whether the health of the world economy or the ongoing conflicts in West Asia were taken up for discussion.

Such neglect is regretful. Although the veritable economic power houses of the world, the US and China, are likely to thrive in the short and medium terms and their ruling strata could be expected to benefit enormously from these ongoing economic interactions the same could not be said of most of the rest of the world and its populations.

Needless to say, the ongoing oil and gas crisis, for instance, resulting from the conflict situation in West Asia, is taking a heavy toll on the majority of the world’s economies and the relevant publics. While no urgent intervention to ease the lot of the latter could be expected from the Trump administration there is much that China could do on this score.

China could use its good offices with the US to address the negative fallout on the poorer sections of the world from the present global economic crunch and urge the West to help in introducing systemic changes that could facilitate these positive outcomes. After all, China remains a socialist power.

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The Quiet Shift: China as America’s “+1” in a Changing World Order

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Xi and Trump

“Everything ever said to me by any Chinese of any station during any visit was part of an intricate design”

— Henry Kissinger

That design may already be complete before this week’s , a meeting that could shape the future balance of global power.

The wind arrives quietly. By the time it is heard, history has already begun to turn. Across Asia, that wind is no longer distant. It carries with it the exhaustion of an old order and the uncertain birth of another. The question now is not whether the world will change. It is whether those who hold power possess the wisdom to guide that change toward something less violent than the century behind us.

Since 1945, the United States has carried the burden of a global order built with its Western allies. To its credit, the world avoided another direct world war between great powers. The conflicts remained contained in distant lands—proxy wars fought in the shadows of ideology, oil, and influence. From Latin America to Asia, the American century expanded not only through prosperity, but through intervention. Yet empires, even democratic ones, grow tired. Fatigue settles slowly into institutions, alliances, and public memory. The role of global policeman no longer inspires certainty in Washington as it once did.

The “rules-based order” now confronts its own contradiction: it was built to be universal, yet it often appeared selective. During my recent visit to , a young researcher asked me quietly, “Does the West itself still believe in the rules-based order?” The question lingered long after the conversation ended. The rising century demands a more inclusive architecture—one that recognises the reality of Asian power, especially China.

My three years of field research across South and Southeast Asia, documented in , revealed a transformation too significant to dismiss as temporary. China has moved beyond being merely a competitor to the United States. In trade, infrastructure, technology, cultural diplomacy, and economic influence, Beijing has established itself as what may be called the world’s “US +1.”

Great powers often search for such a partner. History shows this tendency clearly. When an empire becomes overextended—burdened by wars, alliances, sanctions, tariffs, and crises—it seeks another center of gravity to stabilize the system it can no longer manage alone. The United States today faces disorder stretching from Venezuela to Iran, from Ukraine to the unsettled Middle East. In this landscape, China emerges not simply as a rival, but as a state powerful enough to broker peace where Washington alone no longer can.

Drawing from the lessons of the Nixon–Mao era, warned that “” The United States and China are now engaged in a long-term economic, technological, political, and strategic competition. Managing that competition wisely may become the defining challenge of this century. In such a deeply polarized and unstable world, recognising China as a “US +1” partner is not surrender, but strategic realism.

Donald Trump understood this reality before boarding his flight to meet Xi Jinping. Their meeting inside Zhongnanhai—the guarded compound where China’s leadership governs—was never merely ceremonial. It symbolized a deeper recognition already acknowledged quietly within the itself: China is the nearest peer competitor the United States has ever confronted. Before departing Washington, Trump seemed to reassess not only China’s strength, but its unavoidable position as a “” shaping the future global balance.

Yet the significance of a Trump–Xi meeting extends beyond trade wars, tariffs, or diplomatic spectacle. It presents an opportunity to confront two crises shaping the century ahead: global energy insecurity and regional instability. Washington increasingly understands the limits of direct engagement with Tehran. Decades of pressure, sanctions, and confrontation have produced exhaustion rather than resolution. In that vacuum, Beijing now possesses leverage that Washington does not.

For China, this is an opportunity to evolve from a development partner into a security actor. Xi Jinping’s (GSI) was never designed merely as rhetoric. It was intended as the next phase of Chinese influence—transforming economic dependence into strategic trust. The geopolitical spillover from the Iranian conflict now offers Beijing a historic opening to project itself as a stabilising force in the region, not against the United States, but alongside it as a “US +1” partner.

If China succeeds in helping stabilise the Gulf and secure energy corridors vital to Asia, it will reshape perceptions of Chinese power globally. Beijing would no longer be seen only as the builder of ports, railways, and industrial zones, but as a guarantor of regional balance. This transition—from infrastructure diplomacy to security diplomacy—may become one of the defining geopolitical shifts of the coming decade.

Xi Jinping does not seek open confrontation. His strategy is older, more patient, and perhaps more formidable because of its restraint. Beijing speaks not of domination, but of a “,” advanced through three instruments of influence: the Global Development Initiative (GDI), the Global Security Initiative (GSI), and the Global Civilization Initiative (GCI). These are not slogans alone. Across Asia, many governments increasingly trust China as a development partner more than any other power.

India, despite its ambitions, has not matched this scale of regional penetration. In both ASEAN and South Asia, China’s economic gravity is felt more deeply. Ports, railways, technology networks, and financial dependency have altered the geopolitical map quietly, without the spectacle of war.

In , I compared three inward-looking national strategies shaping Asia today: Trump’s MAGA, Modi’s emerging economic nationalism , and Xi’s strategy. Among them, China has demonstrated the greatest structural resilience. Faced with American tariffs and decoupling pressures, Beijing diversified its supply chains across Central Asia, Europe, and Southeast Asia. Rail corridors now connect Chinese industry to European markets through Eurasia. ASEAN has surpassed the United States as China’s largest trading partner, while the European Union follows closely behind. Exports to America have declined sharply, yet China continues to expand. Trump, once defined by confrontation, now arrives seeking a new “” with China—an acknowledgment that economic rivalry alone can no longer define the relationship between the world’s two largest powers.

Unlike Washington, which increasingly retreats from multilateral institutions, Beijing presents itself as the defender of multilateralism. Whether genuine or strategic matters less than perception. In geopolitics, perception often becomes reality.

What emerges, then, is not surrender between rivals, but interdependence between powers too large to isolate one another. The future may not belong to a bipolar Cold War, but to a reluctant coexistence. The United States now recognises that China possesses diversified markets and partnerships capable of reducing dependence on America. China, in turn, understands that its long march toward global primacy still requires strategic engagement with the United States.

This is where the true geopolitical shift begins.

Many analysts continue to frame China solely as a threat. Yet history rarely moves through absolutes. The next world order may not be built through confrontation alone, but through uneasy partnership. Artificial intelligence, technological supremacy, economic stability, and global governance now demand cooperation between Washington and Beijing, whether either side admits it publicly or not.

Trump will likely celebrate his personal relationship with Xi, presenting himself as the American leader capable of negotiating a “better deal” with China than his predecessors. But beneath the rhetoric lies something larger: the gradual acceptance of China’s indispensable role in shaping the future international order.

Even the question of war increasingly returns to Beijing. If Washington seeks an understanding with Tehran, China’s influence becomes unavoidable. Iran listens to Beijing in ways it no longer listens to the West. This alone signals how profoundly the balance of power has shifted. And Xi, careful as always, refuses to openly inherit the mantle of global leadership. He delays, softens, and obscures intention. It is part of a longer strategy: to rise without provoking the final resistance of a declining hegemon too early.

History rarely announces its turning point. Empires fade slowly, while new powers rise quietly beneath the noise of the old order. Washington still holds immense power, but Beijing increasingly holds the patience, reach, and strategic depth to shape what comes after.

The century ahead may not belong to one power alone, but to the uneasy balance between Washington and Beijing. And in that silence, a new world order is already taking shape.

By Asanga Abeyagoonasekera

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Egypt … here I come

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Chit-Chat Nethali Withanage

Three months ago, 19-year-old Nethali Withanage, with Brian Kerkoven as her mentor, walked the ramp at Colombo Fashion Week. On 06 June, she’ll walk for Sri Lanka in Hurghada, Egypt, as the country’s delegate to Top Model of the World 2026._

I caught up with Nethali as she prepares to fly out, this weekend, and here’s how our chit-chat went:

1. Tell me something about yourself?

I’m someone who blends creativity with ambition. I’ve always loved expressing myself, whether it’s through fashion, styling, or the way I present myself to the world. At the same time, I’m very driven and disciplined, especially when I was working, as a student counsellor, at Campus One, at a young age, where I’ve learned how to connect with people, understand them, and communicate with confidence. I believe I’m still evolving, and that’s what excites me the most … becoming better every single day.

2. What made you decide to be a model?

Modelling felt natural to me because it combines everything I love – fashion, confidence, and storytelling without words. I realised that modelling isn’t just about appearance, it’s about presence and how you carry your energy. I wanted to be part of an industry where I could express different sides of myself, while inspiring others to feel confident in their own skin.

3. What sets you apart from other models?

I would say my ability to connect. Whether it’s with the camera, a brand, or an audience, I bring authenticity. I also have a strong background in communication and sales, which gives me an edge in understanding how to represent a brand, not just wear it. I don’t want to just model clothes, I want to bring them to life.

4. What clothing do you prefer to model?

I enjoy modelling versatile styles, but I’m especially drawn to elegant and expressive fashion pieces that tells a story. I love looks that allow me to embody confidence and femininity, whether it’s a structured outfit or something soft and flowing.

5. What is the most important aspect of modelling?

Confidence combined with professionalism. Confidence allows you to own the moment, but professionalism ensures that you respect the work, the team, and the brand you represent. Both are equally important.

6. If you could change one thing about yourself, what would it be?

I would say I’m learning to trust myself more and not overthink. I’ve realised that growth comes from embracing who you are, not constantly trying to change it. So instead of changing something, I’m focused on becoming more confident in my own voice.

7. School?

I did my O/Ls at Seventh Day Adventist High School Kandana, and, while at school, I was actively involved in creative activities. I enjoyed participating in English Day events that allowed me to express myself and interact with others. Those experiences helped me build confidence, teamwork, and communication skills, which continue to shape who I am today.

8. Happiest moment?

One of my happiest moments is realising how far I’ve come from being unsure of myself to stepping into opportunities, like modelling, and representing myself with confidence. That feeling of growth is something I truly value, and also a dream come true!

9. Your idea of perfect happiness?

Perfect happiness for me is peace of mind, being surrounded by people I love, doing what I’m passionate about, and feeling proud of who I am becoming.

10. Your ideal guy?

My ideal partner is someone who is respectful, supportive, and confident in himself. Someone who values growth, understands my ambitions, and encourages me to be the best version of myself.

11. Which living person do you most admire?

I admire strong, self-made individuals who have built their identity through hard work and resilience. People who stay true to themselves, despite challenges, inspire me, because they show that success is not just about talent, but also about strength and consistency.

12. Your most treasured possession?

My most treasured possession is my confidence. It’s something I’ve built over time, and it allows me to face challenges, take opportunities, and believe in myself, even when things are uncertain.

13. If you were marooned on a desert island, who would you like as your companion?

I would choose someone who is calm, positive, and resourceful, someone who can turn a difficult situation into an adventure. The right mindset matters more than anything.

14. Your most embarrassing moment?

I’m 19 and still haven’t faced any most embarrassing moment. But I would say I’ve had small moments where things didn’t go as planned, but I’ve learned to laugh at myself. Those moments remind me that perfection isn’t necessary; confidence is about how you recover, not how you avoid mistakes.

15. Done anything daring?

Pursuing modelling and stepping into competitions is something I consider daring. It pushed me out of my comfort zone and challenged me to grow, both personally and professionally.

16. Your ideal vacation?

My ideal vacation would be somewhere peaceful, yet beautiful, like a beach destination where I can relax, reflect, and reconnect with myself, while enjoying nature.

17. What kind of music are you into?

I choose music that matches my mood at that time, whether it’s calm and relaxing or energetic and uplifting. Music is something that helps me express emotions and stay inspired.

18. Favourite radio station?

Usually I don’t listen to radio stations but whenever I get into a car I would search for Yes FM because it has a refined balance of contemporary hits and timeless music. I appreciate how it maintains a vibrant yet sophisticated energy, keeping listeners engaged while creating a consistently uplifting atmosphere. It’s something I enjoy because it adds a sense of positivity and elegance to my day.

19. Favourite TV station?

At the moment, I don’t have a television at home, but growing up, my favourite TV station was ‘Nickelodeon’. I genuinely loved the shows and series it aired; they were fun, creative, and full of personality. It was something I always looked forward to, and those memories still bring a sense of joy and nostalgia, whenever I think about it.

20. Any major plans for the future?

My future plans are to grow in the modelling industry, work with international brands, build a strong personal brand and finish completing a Bachelor’s Degree in Business Studies. At the same time, I want to explore my creative side further, especially in fashion and business, so I can create something of my own one day.

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