Businesses and Government Need To Commit To A Living Wage

It is time for business to step up with practical action on the major issues confronting humanity.

The world faces three great challenges: a runaway climate emergency; the degradation of nature, and rising inequality.  Emissions are increasing – we now emit over 37 billion tonnes of CO2 each year[1].  The destruction of nature is accelerating – 10 million hectares of forest are cut down each year[2].  Within-country and between-country inequalities are as great in 2020 as they were in 1910[3].

The unpleasant truth is that we are going backwards.

Addressing these challenges is not easy.  We are tackling them at a time of geopolitical upheaval and increasing short term emergencies.  Emergencies that are often caused by climate change itself.  Most fundamentally, we are tackling these problems within the system that created them.

That does not mean we throw the system out.  But it does mean that we need reform.

We must harness the good aspects of capitalism – innovation and wealth creation that has lifted hundreds of millions out of poverty.   But we have to address the harmful aspects of today’s model of capitalism – cost externalisation on natural resources, and excessive concentration of wealth.  The ecosystems essential to our survival are being destroyed at an alarming rate, and our societies are fracturing.

But what does that mean practically for business?  Well, business has been, and can remain, a powerful force for good.  For example, in helping to tackle inequality.

71% of the world’s population is living in countries where inequality is growing[4]. It is clear our current distribution of opportunity, income, wealth, and wellbeing is leaving hundreds of millions of people behind, with nearly 700 million workers paid poverty wages[5].  The current cost-of-living crisis has hit this group the hardest.

One of the most powerful actions businesses can take is to simply pay a living wage – one that enables workers to provide properly for their families.  Just the basics – housing, food, clothing, education, and health care.

It’s the right thing to do, certainly.  It also has a strong commercial case for action.  Living wages increase worker productivity, reduce worker turnover, create more resilient value chains, and grow consumer markets[6].  Living wages could also add nearly 5% or $4.56 trillion to global GDP every year through increased productivity and spending[7].  I can’t think of any other focused, relatively simple, relatively inexpensive, action by business that would boost global GDP by 5%.

Yet, only 4% of companies have a commitment to pay a living wage[8].  The remaining 96% are missing out on the benefits, and facing a wave of increasing regulatory, investor, and disclosure pressure. Last year, the EU proposed legislation on Corporate Sustainability Due Diligence that would ensure companies prevent violations on living wages.  Investor groups such as ShareAction’s Good Work Coalition, including Legal & General Investment Management, Aviva Investors, and Columbia Threadneedle, are ramping up the pressure.  Rankings and ratings such as the World Benchmark Alliance and the Dow Jones Sustainability Index are increasingly demanding corporate disclosure on living wage.

Businesses can get ahead and reap the benefits, or scramble to catch up.

Unilever pays its own employees a living wage and has a commitment to ensure that everyone who directly provides goods or services to our company will earn at least a living wage or income by 2030.

Securing living wages across our supplier base is not easy.  We can’t do it alone.  Unilever is focused on three key shifts to help the delivery:

  1. Governments must step up and set minimum wages to be at least equal to living wages – the most effective way to lift people out of poverty.
  2. We need to address challenges which hinder implementation such as improving the availability and credibility of living wage data.  What is a living wage in one location is a poverty wage in another – even within a country.
  3. We need widespread adoption of living wage commitments by businesses.  Unilever endorses the UN Global Compact’s Call to Action on Living Wage, calling on UNGC’s 16,000 members to start closing the gap in their own operations and supply chains.

Momentum is building behind living wages.  The actions for business are clear and deliverable.  This is one failure of capitalism that can relatively easily be reformed.

Alan Jope is CEO of Unilever.

[1] Our World In Data. (2021). CO2 emissions. Retrieved from

[2] UN FAO. (2020). Global Forest Resources Assessment 2020. Retrieved from

[3] Chancel, L. P. (2022). World Inequality Report. World Inequality Database.

[4] UNDP. (n.d.). Inequality – Bridging the Divide. Retrieved from

[5] ILO. (2020). World Employment and Social Outlook. Retrieved from—dgreports/—dcomm/—publ/documents/publication/wcms_734479.pdf

[6] Barford, A., Gilbert, R., Beales, A., Zorila, M., & Nelson, J. 2022. The case for living wages: How paying living wages improves business performance and tackles poverty. Business Fights Poverty, University of Cambridge Institute for Sustainability Leadership & Shift. Retrieved from:

[7] Business Commission to Tackle Inequality. (2021). Tackling Inequality: The need and opportunity for business action. Retrieved from

[8] World Benchmarking Alliance. (2022, January 26). Report finds only 1% of companies demonstrate fundamentals of social responsibility. Retrieved from



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