The question should actually be: are you creating good employment? It is widely recognised that small and medium sized enterprises are good for a national economy, not in the least because, taken together, these types of enterprises have the potential to create a lot of employment. In the countries where we work, unemployment is a major challenge, so jobs and income generation opportunities are very welcome.
When do you pay a fair wage to your employees?
Unfortunately, not all jobs are good jobs. Take the issue of living wages, for example. A living wage means that a worker’s salary is sufficient to take care of himself/herself and his/her family. If employees do not receive living wages, they will live in poverty and may be forced to take on other jobs, which will have a negative impact on their productivity. Do you pay a living wage to your employees? You can check what the living wage is in your country at WageIndicator.
How do you pay a fair price to suppliers?
The same is true for suppliers. Instead of employing people, you might be generating work and income through purchasing from suppliers such as farmers or craftsmen. The question is: do the suppliers receive a price that is fair for the work they do and which will allow them to make a living? The living wage can be used to calculate a fair price. Add the production costs to the living wage and divide this amount by the quantity produced to calculate a fair price. Add a bit so that farmers can invest in seeds, fertilisers, mechanisation and other input. This sounds far more simple than it actually is, since not all farmers can produce the same quantity, and quantities vary according to circumstances. While a fair price will thus vary too, it is at least a rough guide and a basis for negotiation with your suppliers. Click here for a guide on calculating fair prices.