Benchmark Report: Living Income and Living Wage Report and 2024 Update for Rural Oromia, Ethiopia
2024 Living Wage Update Report: Living Wage Report for Rural Oromia, Ethiopia
Abstract
This report provides updated estimates of family living expenses and living wages for rural Oromia in Ethiopia. The update for June 2024 takes into account inflation and changes in payroll deductions since the original Anker living wage study carried out in July 2023 (Seyoum, et al., 2023).
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Original Report
2023 Benchmark Report: Living Income and Living Wage Report for Rural Oromia, Ethiopia
Abstract
In this report, we present the living income for the typical household in coffee growing rural Oromia, Ethiopia. We used the Anker Methodology to estimate living wage and living income by estimating the cost of a low-cost nutritious model diet, basic healthy housing and all other non-food and non-housing goods and services, including for education through secondary school and adequate health care for a typical household, like those of coffee producers. For this, we analyzed primary data from the Jimma Zone which was collected during focus group discussions with smallholder coffee growers, interviews with local coffee and tea authorities, house constructors, health care providers, and schools during surveys of food prices in local markets and health care costs in clinics and hospital. We also analyzed demographic, anthropometric, labor market, household expenditure and income data from secondary official sources. We estimate that as of July 2023, the cost of a basic but decent life, or living income, for a typical family in rural areas of the Jimma Zone is Birr 16,512 (USD 302) per month, or Birr 198,144 (USD 3,624) per year. Taking into account labor force participation rates, unemployment rates and part-time employment rates of workers in the area, we estimate that the net living wage (take-home-pay) for a full-time worker is Birr 10,320 (USD 189) per month. Mandatory social security and income taxes for formal workers imply that the gross living wage (aka living wage) per month is Birr 15,207 (USD 278). These values in US dollars are only indicative as the exchange rate is volatile, and the Birr depreciated against the US dollar after our July 2023 study. Also, these values need to be continuously updated because of Ethiopia’s annual inflation rate which is currently running at around 30 percent.
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