For several years over 680 workers producing Unilever’s Bango in Indonesia have been fighting for the right to negotiate fair wages. In 2021 they launched protest actions demanding a living wage. In July 2022, Unilever responded with its global Living Wage formula. According to Unilever, the Living Wage includes work uniforms, company picnics, mandatory company contributions to government health insurance and pensions, mandatory annual religious allowance, annual bonuses and even death insurance contributions.
So in effect, all these company expenses including employer contributions to health insurance, pensions and religious allowances required by law, are Unilever’s contribution to a workers’ ability to meet the needs of her family. This leaves actual wages needed to meet living costs much lower because Unilever believes it has already contributed to living costs – with uniforms and company picnics.
The product the workers at the Bango factory make generates so much wealth for Unilever that is is listed in the top 28 Sustainable Living Brands globally. Yet the brand contributes nothing to ensuring workers and their families can live decently. Unilever’s Living Wage now being imposed unilaterally on the workers at Bango simply does not meet basic living costs.
While Unilever claims this Living Wage formula is global, there is no evidence to suggest that the living wage calculations for workers in Europe include company picnics, uniforms or mandatory social and medical benefits, annual bonus, or death insurance.
At the same time Unilever promotes its use of the Living Wage calculated by the Fair Wage Network. The company claims that a living wage is determined for each and every location globally based on an assessment of the cost of living. However, there is no clarity on how the carefully assessed cost of living fits with the Living Wage formula that includes uniforms, picnics and annual bonuses. The most likely answer is that the Living Wage formula simply helps the company come up with a figure close enough to the Fair Wage figure for living costs. The problem is that uniforms, company picnics, mandatory pension contributions and death insurance do not help families meet these living costs.
Deeply frustrated with Unilever’s response and its unfair and irrational use of a Living Wage calculation that has absolutely nothing to do with the cost of living and families’ needs, the union has continued its protest actions.