I get emails like this from a lot of people. But I’m featuring Mitchell’s email here because it also gave a great suggestion.
I’ve listened to every podcast episode you have, I love them, short and sweet and to the point which I appreciate it.
I would love to hear some episodes on compensation for OFS’s. I know that will vary based on what position they do, how skilled they are, where they are located, etc. Just like someone in New York City or LA is gonna make more than someone in a small town typically, but I’d love to hear from you and your team about the minimum wage there, how that works and what is considered “good”, “great” and “amazing” in terms of salary and what things cost over there to help us Americans better picture it in our minds of what things cost over there.
Thanks in advance! I’m looking forward to this episode!
Now that we got that out of the way, let’s talk about minimum wage in the Philippines.
The minimum wage is different per region in the Philippines and it’s determined by a government committee called Regional Tripartite Wages and Productivity Board. They base the minimum wage on the cost of living, socioeconomic factors, and salary trends. Metro Manila and other big cities like Cebu and Davao have the highest minimum wage.
Are these rates good starting salaries? Not really.
Below is another table that shows the monthly expenses of an average 3-person family every month.
Now, let’s compare that to the minimum wage.
As you can see, the minimum wage really isn’t enough to cover most of the basic needs. This is why most Filipino homes have 2 breadwinners and why working abroad continues to be an attractive option.
When Filipinos work from home, a lot of those expenses can go down. The commuting, clothing, and food expenses go down because they don’t have to go out as much. Some might be able to get rid of rent altogether because they don’t need to move close to the city. The computer, electricity, and internet costs may go up but considering how much you’re saving by not having to go out every day, that increase is negligible.
In our salary guide, you’ll see that the minimum rate there for inexperienced workers is around twice the minimum wage. It’s enough to cover their expenses and gives you a lot of room to give your workers a raise.
I’ll have more newsletters talking about this. I want to give you guys a better picture of the cost of living difference between Filipino workers in Luzon, Visayas, and Mindanao.