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From Ambition to Action: making living wage a collective reality in the Philippines

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In support of our global ambition to improve the livelihoods of people in our value chain, including by earning a living wage, Unilever Philippines developed an impact study to analyze the potential effects of promoting Living Wages in the Philippines. The study examined both the potential advantages and disadvantages, as well as intended and unintended consequences that may impact individual employees, employers, and the overall Philippine economy.

Image shows key stakeholders to drive the living wage commitment in the country

Wages That Work: Living Wage Dialogue for Employees, Employers and the Economy

Unilever Philippines launched its Living Wage Impact Report findings in February with an external-facing event, called Wages That Work, co-presented by Eco-Business. The event was attended by over 60 corporate, government, trade union, civil society, and academic representatives and provided the opportunity to share:

  • The fundamentals of living wage, and its benefits to employees, employers, and the economy, including lessons from Unilever’s own experience to pay its direct employees a living wage;
  • The dynamic stakeholder landscape with viewpoints from the Philippine Government, the International Labor Organization and Nagkaisa Labor Coalition; and the challenges and opportunities faced by our stakeholders when advancing living wages through effective collaboration.
Image collage of Living Wage event panelists and speakers

Key Highlights of the Living Wage Impact Study[a]

Paying a living wage will benefit:

  • Employees as they receive direct benefits such as salary increases, and/or non-cash benefits enabling them to better meet their and their families’ needs, thereby increasing their level of satisfaction.
  • Companies benefit from improved productivity (6.6%) and reduced turnover (21.3%) which saves cost on recruitment, training and onboarding new employees.
  • At a macroeconomic level, all three indicators studied (Net Present Value (NPV), Economic Internal Rate of Return (EIRR) and Benefit Cost Ratio (BCR)) provided positive results. Depending on the implementation scenario (i.e. immediate or deferred), NPV would represent nearly 9.8-11.9B Pesos (approximately 160.3-194.7M Euros) to GDP, there would be 26.7-32.7% EIRR and the BCR ranged from 1.15-1.19.

Implementation considerations

  1. The panel discussion highlighted the importance living wage plays in supporting workers and building resilient economies.
  2. It particularly focused on the need for governments, employers, trade unions and other stakeholders to collaborate to ensure that living wages are implemented carefully and in a phased approach, finding the right balance between managing and absorbing costs and taking advantage of the benefits it can provide.
  3. To accelerate the momentum for living wages, the private sector has a pivotal role to play, with support from government, civil society, and labor groups.

Available resources shared to attendees

In addition to the executive summary of the report, Unilever’s all-inclusive library was shared with the attendees to assist them in their living wage journeys. This includes:

  • Benchmarks Data – free access to WageIndicator Foundation data
  • Playbook - An interactive guide to introduce the core concepts, and steps in achieving a living wage
  • FAQs - Comprehensive living wage Q&A that is regularly updated
[a]

Findings and conclusions presented in this study are based on the data collected and analyzed at the time of the research.

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