Organiser
Rising inequality is one of the most pressing challenges facing our society today – on par with the climate emergency – and this must be addressed with the same level of urgency. According to the International Labour Organization, over a billion workers worldwide earn less than they need to afford a decent standard of living, thus, spotlighting the concept of a living wage.
A living wage allows for decent living conditions for workers and their families, covering adequate and safe food, water, housing, education, and provisions for unexpected events.
In the Philippines, more than 17.5 million people – or around 15.5 per cent of the entire population – live below the poverty line. With the average minimum wage of around ₱475 per day, this amount is roughly half of the estimated living wage benchmark of ₱896.48 per day required for a decent standard of living (Wage Indicator).
This glaring gap clearly suggests that many minimum wage earners struggle to meet basic everyday needs.
In May 2023, the Business Commission to Tackle Inequality, a coalition of more than 60 organisations with Unilever at the forefront published their flagship report providing the private sector, for the first time, a common and holistic agenda to tackle inequality. Paying a living wage came out as a crucial solution as it raises the floor for those at the bottom of the pyramid.
Following this, in May 2024, the ILO released a landmark definition of a living wage during its ongoing discussions on wage policies, defining living wage as “the wage level necessary to afford a decent standard of living for workers and their families, taking into account country circumstances and calculated for work performed during normal hours.”
This sees a wide range of workers impacted, from agricultural workers; those in the manufacturing, retail, hospitality, construction, and services sectors; employees in small retail and service establishments; to domestic workers.
Perhaps more importantly, this prompts companies to take responsibility in ensuring that all employees – especially those involved in their supply chains – earn a living wage.
A Living Wage Impact study developed by Unilever with technical inputs from SGV & Co. found that while addressing the living wage gap may incur short-term financial implications for enterprises, doing so could lead to improved quality of life for workers; reduce employee turnover and absenteeism; and increase worker productivity.
Motivated employees, the study found, could mean higher output volumes and fewer production defects, and lead to cost savings due to reduced product waste and rework time. This will require supply chain partners to meet the needs of employees – especially unmet needs – in order to improve their quality of life.
Cognisant of the advantages of a livable wage level, Unilever has been paying a living wage to its direct employees since 2020, certified by the Fair Wage Network. The next part of this path is working with its value chain partners and suppliers to sign the Living Wage Commitment, signaling the start of their living wage journey in their operations for their respective employees.
While implementing living wages is commendable, challenges remain in achieving a living wage, such as comprehensive policy frameworks, legislative barriers, inflation, and the rising cost of living.
Eco-Business, in partnership with Unilever Philippines, is organising a by-invitation high-level stakeholder dialogue to discuss implementing a living wage in the Philippines – one that is inclusive, meaningful, and built for the long run. The forum will also discuss key insights and findings from a recent study on living wage developed by Unilever with technical inputs from SGV & Co.
The event ultimately aims to raise awareness about the importance of a living wage, and foster constructive engagement with key stakeholders to start their living wage journey in the Philippines, ultimately with outcomes that would benefit workers, businesses, the economy, and the larger society.
