Bulatlat.com

Real Wage Decreased by P13.20 in 12 years

By DANILO ARAÑA ARAO
Bulatlat.com

When Congress tackles on Wednesday (September 5) the merits of a legislated wage hike, it would do well for legislators to seriously study the hard facts of wage increases through the years.

From 1989 to 2001, nominal wages have increased by only P9.69 (US$0.19) on the average. In real terms, however, worker’s wages have decreased by P1.01 ($0.02).

In 1989, the real wage was pegged at P101.60 ($1.99) but 12 years after, it has decreased to P88.44 ($1.74).

Nominal wage refers to the face value of the given amount while real wage pertains to the comparison of the value of wages through the years according to a given base year.

Using 1990 as base year, Bulatlat.com computations further show that daily cost of living in the Philippines has been pegged at P638.32 ($12.53) on the average from January to July 2001, a 211% increase from the 1991 figure of P205.46 ($4.03).

It may be recalled that Bulatlat.com previously computed daily cost of living as of July 2001 at P426.79 ($8.38) nationwide using 1994 as base year (See Bulatlat.com Issue No. 26).

The dramatic increase in cost of living may be contextualized in the 8.2% average inflation rate for the past 12 years.

Since wages were not able to cope with increasing cost of living, the worker’s monthly wage currently accounts for only 25% of the monthly cost of living, a substantial decline from the already dismal 40% percentage share in 1991.

The Kilusang Mayo Uno (KMU) and the newly formed Wage Increase Solidarity (WINS 125) are at the forefront of the struggle for a nationwide and across-the-board P125 ($2.45) wage increase. Bayan Muna Partylist Rep. Crispin Beltran is scheduled to deliver his first privilege speech on the issue of workers’ wages on Wednesday (September 5). Bulatlat.com

MONTHLY LIVING WAGE GAP Philippines (non-agriculture)
	*2001*	*Average (89-01)*
Consumer Price Index (CPI), 1990=100	243.0	165.4
Inflation Rate	5.2%	8.2%
Purchasing Power of the Peso (PPP) (i.e., 1/CPI x 100)	0.41	0.66

Nominal Daily Wage Rate (NW)	214.92	147.60
Nominal Increase / (Decrease)	1.27	9.69
Real Daily Wage Rate (i.e., NW x PPP)	88.44	90.22
Real Increase / (Decrease)	(4.05)	(1.01)
Daily Cost of Living for a family of six (DCOL), 1988/1990 base years	638.32	335.92
Monthly Cost of Living for a Family of Six (DCOL x 30 days) - MCOL	19,149.67	10,077.69
Gross Monthly Nominal Wage (NW x 22 days) - MNW	4,728.17	3,247.28
ESTIMATED MONTHLY LIVING WAGE GAP (i.e., MCOL - MNW)	14,421.51	7,156.34
Percentage share of Monthly Wage to Monthly Cost of Living	25%	32%
*Sources of basic data:* DOLE, NSO, UN-ESCAP *Notes:* 1. 2001 data as of end-August only \| 2. 2001 figures are deflated computations from base year 1994 to 1990 3. 2001 CPI data are from January to July only \| 4. 2001 NW data are as of August 31 only 5. 2001 DCOL data are deflated from 1994 to 1990

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