S-LCA and the S-eco-costs

This webpage describes the socio-economic costs (s-eco-costs) method for monetization of ‘external’ socio-economic burden for workers.
The s-eco-costs are the marginal prevention costs to reach a sustainable level (the Performance
Reference Point, PRP) for wages and are the monetary compensation costs beyond the PRP to account for unacceptable exploitation of workers.
The s-eco-costs (in €) include five sub-indicators, proposed as a base-line for several social issues:

  • Minimum Acceptable Wage (based on minimum wages in rich countries and statistics on
    economic migrants)
  • Child Labor (forced labor, not able to attend school)
  • Extreme Poverty (derived from World Bank absolute poverty line)
  • Excessive Working Hours (forced labor, involuntary)
  • Occupational Safety and Health (based on statistics of ILO)

There are basically two  ways to calculate the burden of unacceptable exploiting of workers: (1) calculation the damage via impact pathways, which are cause-effect chains (2) the use of so called Performance Reference Points (PRPs). In a broad study on how to define and structure S-LCA (UNEP/SETAC, 2009) the method of the PRPs is preferred for quantitative assessments (see page 70), since “cause-effect relationships are not simple enough, or not known with enough precision to allow quantitative cause-effect modelling”. In fact this is the same argument to prefer prevention based indicators in LCA (in contrast to damage based systems) in the eco-costs system.

The s-eco-costs of a product are based on the salaries per working hour, the working conditions and the required time to make a product. In formula:
‘total s-eco-costs of a product’= ‘hours to make a product’ x ‘s-eco-costs (€/hour)’

Content

These data must be measured at the factory and based on the actual situation. Data on salaries are to be calculated in Int $ PPP (Purchasing Power Parity), because the normal exchange rates of currencies would give the wrong picture for benchmarking between different countries.
Note: 1 Int $ PPP is approx. 0.83 €.

This webpage gives a summary of the calculation method. The details of this method can be found in (Van de Velden et al. 2017, Supplementary Materials).