This story
was taken from Bulatlat, the Philippines's alternative weekly
newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. V, No. 12, May 1-7, 2005
LABOR WATCH
Wage Hike Should Not Depend on Regional
Wage Boards – Solon, Labor Economist
The President’s hints on the
possibility of a wage increase for Labor Day would have been a glimmer of hope
if they were clearly not dependent on the decisions of the Regional Wage Boards,
says Anakpawis Rep. Crispin Beltran. A labor economist interviewed by
Bulatlat explains why.
BY ALEXANDER MARTIN REMOLLINO “Malacañang’s offer of a
wage increase as a gift for workers on Labor Day had better be a national
legislated wage increase and not an Emergency Cost of Living Allowance (ECOLA)
and measly increases through the regional tripartite wages and productivity
boards,” says Anakpawis (Toiling Masses) Rep. Crispin Beltran, a few days before
Labor Day. Labor unions under the
banner of the Kilusang Mayo Uno (KMU or May First Movement), which is
celebrating its 25th founding anniversary this year, have been
demanding a P125 across-the-board, nationwide wage increase since 1999 – when
the national average daily cost of living for a family of six, or the average
Filipino family, was still P388.71 ($9.94 based on the year’s exchange rate of
$1:P39.09). Since then, the national average daily cost of living for an
ordinary Filipino family has shot up to P587.33 ($10.79 based on an exchange
rate of $1:P54.45 as of April 29, 10:50 a.m. Philippine time). The National Capital Region
(NCR) remains the region with the highest average daily minimum wage, with P250
plus P50 cost-of-living allowance, or a total of P300 ($5.51) daily. Malacañang (the
presidential office) had hinted at the possibility of a wage increase early last
week. However, the Palace still seemed to be looking to the Regional Wage Boards
for action on the issue. “The government is taking
all reasonable means to cushion the impact of rising prices. And one of these is
a strong pitch for an active wage review by the wage boards,” said Press
Secretary Ignacio Bunye in an April 21 press statement. RA 6727 The Regional Wage Boards
are a product of Republic Act No. 6727, signed into law in 1989 and otherwise
known as the Wage Rationalization Act. The act abolished the national minimum
wage rate, said Paul Quintos, executive director of the Ecumenical Institute for
Labor Education and Research (EILER), in an interview with Bulatlat. “There is now no real
minimum wage to speak of,” said Quintos, who also holds an MSc in Development
Studies from the London School of Economics (LSE) and is a former research
associate at the Philippine Institute of Development Studies (PIDS). The Philippine Congress
enacted Republic Act No. 602, known as the Minimum Wage Act, on April 6, 1951.
In his book, The Political Economy of Philippine Labor Laws, Dr. Edberto
Villegas, who used to chair the Development Studies Program at the University of
the Philippines (UP) in Manila, wrote that RA 602 was enacted amid labor
restiveness due to miserable workers’ conditions in the years immediately
following World War II (1939-1945). RA 6727 did away with RA
602, said Quintos. “It was not declared outright that the national minimum wage
was to be abolished,” he points out. “That was rather a consequence of the
enactment of that measure.” Under Sec. 2 of RA 6727, government is
supposed to
rationalize the fixing of minimum
wages for the workers and their families while enabling business and industry
reasonable returns on investment, expansion and growth. The act also
established
collective bargaining as “the primary
mode of setting wages and other terms and conditions of employment.” The minimum
wage rates will be adjusted based on regional disparities in the cost of living,
among others.
Rationalization:
politics and economy But Quintos said, the “rationalization” of
wage setting had the political effect of dividing workers’ struggles.
“Before, whenever workers brought forth their
demands for wage increases, they did it collectively,” he said. “Now, the
tendency especially for those who confine themselves to legal details – the
so-called ‘yellow’ or conservative unions – is to address their demands only to
their respective Regional Wage Boards. So what happens is that they tend to act
separately, they tend to conduct their campaigns separately.” “The laws of history teach us that when the
masses fight separately, they are weak,” Quintos added. “Their strength lies in
their unity.” Economically, he said, wage rationalization
limits workers’ right to demand wage hikes. The Regional Wage Boards cannot
grant more than one wage increase every year, he explained. “For example, if they grant a P30 increase in
the emergency cost-of-living allowance or ECOLA, that’s it: you cannot demand
another increase for the same year even if prices rise quickly enough to overrun
whatever gains you may have made,” he said. Another issue against the Regional Wage
Boards, said Quintos, is their very composition. RA 6727 provides for tripartite
Regional Wage Boards, composed of one representative each from business,
government, and labor.
“But business and government are of the same
perspective,” said Quintos. “Government bases its decisions on labor issues on
the premise of ‘maintaining investor confidence’ and so on. As regards the labor
representatives, they are usually from the conservative unions, which makes them
easy to coopt.”
Asked whether wage rationalization has something
to do with the structural adjustment loans or SALs granted by the International
Monetary Fund and the World Bank (IMF-WB) to the Philippines since the late
1970s, Quintos said it does, considering that labor flexibilization is the
neo-liberal agenda for the labor sector.
“Generally, labor flexibilization aims to give
capital – not labor – more flexibility,” Quintos pointed out. “It consists of
whittling down labor’s hard-earned victories which capitalists may perceive as
fetters to their unbridled exploitation of labor.”
Quintos however said that the Philippines has no
specific SAL commitment to “rationalize” wage-setting. Nevertheless, he said,
wage “rationalization” was devised by the government to fit into the neo-liberal
scheme of providing an “investment-friendly” climate. Bulatlat © 2004 Bulatlat
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