French tire giant Michelin has just pledged to roll out a living wage in the markets where it operates, including Spain. It employs more than 7,400 workers here and four factories in the Basque Country and Castile and Leon. The multinational company defines this salary limit as one that allows the employee to cover the basic needs of a family of four (food, housing, transportation, education, and health expenses), in addition to achieving a savings base to deal with unexpected events and obtain consumer goods. Michelin does not put numbers on this initiative, through which it seeks to increase social cohesion, but confirms that in most cases, a decent wage will be higher than the legal minimum wage, which in France totals 21,203 euros per year and in Spain. 15,876 euros. This salary will be accompanied by social benefits and permanent training.
This measure is good business practice, but it is still devoid of essential details to assess its significance and true impact, both on the wages of Michelin's workforce and on the company's profit and loss account. How much do they get paid now and how much do they need to make to make the salary decent? Without more clarity, it will be difficult to control the evolution of salaries, and it will not be possible to achieve the salary transparency that every developed society needs.
But in any case, the companies that get this mission right are those that ensure that all their employees are able to reach a decent standard of living, which is essential for enabling people to progress without harming the planet. Thanks to these and other complementary measures – such as developing a career plan – companies will be able to retain talent, improve the work climate, reduce employee turnover, increase productivity, and combat absenteeism. This will also improve their reputation and gain appeal from socially responsible customers.
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