Labor Day Analysis

Can Workers Count on a Wage Increase in Election Season?

Demands for a substantial wage increase are not hinged on the workers’ wealth accumulation, but merely on the family’s survival amid hard times. As the nation celebrates Labor Day within an election campaign, the possibility of a wage increase looms, along with other labor-related benefits. Should workers be happy with this development?

By DANILO ARAÑA ARAO
Bulatlat.com

Wages are low and prices are high. That a worker’s take-home pay is not enough to take him or her home is not a joke but a brutal reality.

The campaign by militant labor for a P125 ($2.24, based on exchange rate of P55.75 per US dollar) across-the-board increase in the daily minimum wage rates nationwide started on Aug. 25, 1999. At that time, the minimum wage in Metro Manila was pegged at P198 ($3.55) and the cost of living for a metropolis-based family of six amounted to P455.82 ($8.18).

At present, however, Metro Manila minimum wage workers earn P280 ($5.02) daily. This is not even half of what the National Wages and Productivity Commission (NWPC) places as the family living wage in the national capital region - P594 ($10.65).

Thus, actual wages are clearly not enough to provide for the family’s basic needs. It has come to a point where parents earning minimum wage are still short of meeting the family’s decent living requirements, prompting them to either take on a second job or see their own children working for additional income.

More alarming

The situation becomes more alarming when analyzing the extent of wage erosion through the years. While petty wage increases have been granted in the past, these were clearly offset by increased prices of commodities.

Data from the Department of Labor and Employment (DoLE) and the National Statistics Office (NSO) show that the real value of wages did not have any significant change. This is not much of a surprise since the purchasing power of the peso (PPP) has significantly deteriorated since 1999. (See Table)

The PPP refers to the equivalent value “at base year prices of goods and services that a peso can buy at current prices.” In other words, this refers to the buying power of one peso at present compared to the prices of goods and services in a given base year, in this case 1994. The real value reflects how much of a given amount has been lost due to increased prices of goods and services at present compared to 1994.

Based on Bulatlat.com computations, wages have been substantially eroded since 1999 when the campaign for a P125 ($2.24) nationwide wage hike campaign started. In the entire country, the wage erosion from 1999 to 2004 ranged from 31 percent to 43 percent.

In Metro Manila, the government increased the daily minimum wage from 1999 to 2004 by P56.50 ($1.01). However, this only translates to a P1.99-increase ($0.03) in real terms. The situation is worse in areas outside Metro Manila where the nominal increase of P25.60 ($0.46) does not amount to anything since real wages fell by P3.27 ($0.06).

Continuing demand

These clearly explain why workers continue to ask for P125 despite government’s move to grant minuscule increases in the past. And while the bill seeking to do so remains pending in Congress, the workers’ demand for a P60 “immediate relief” must be analyzed in this context.

The data are also more than enough reasons to grant a substantial wage increase now. The government’s refusal to do so through the years only reflects its insensitivity to the workers’ plight.

As the nation celebrates Labor Day within an election campaign, the possibility of a wage increase looms, along with other labor-related benefits. (The President’s own advisers have so far announced at press time only non-wage increase.) After all, the powers-that-be are doing anything and everything to stay in power and it is politically sound to give workers what they want in the hope that such moves will be translated into votes on May 10.

Does this mean victory for the labor movement? Workers know better than to remain complacent as the struggle for better working conditions go beyond the “quantifiables.” After all, the struggle for qualitative change in social conditions warrants the unwavering commitment of workers to end not just exploitation and oppression in the workplace but in the whole society as well. Bulatlat.com

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