This story was taken from Bulatlat, the Philippines's alternative weekly newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. VI, No. 12, April 30-May 6, 2006

LABOR WATCH

Amid High Living Costs and Growing Poverty:

Workers’ Demand for Decent Wages Becomes More Urgent

As more families are pushed to poverty, the fight for decent wages becomes a life-and-death struggle for the workers.

BY JENNIFER DEL ROSARIO-MALONZO

IBON Features

Posted by Bulatlat

In the five years of President Gloria Macapagal-Arroyo in power, the basic wages of workers have scarcely moved, with only a few pesos given as cost-of-living allowances augmenting the minimum wages.

The Filipino people are asked to “share” the burden of the country’s crisis by enduring paltry wages in the face of higher living costs, and paying more taxes. But as more families are pushed to poverty, the fight for decent wages becomes a life-and-death struggle for the workers.

Ensuring wages are adequate for the needs of workers and their families would significantly uplift the lives of millions of Filipinos. But workers’ wages have remained low over the years. The highest daily minimum wage in the country is only P325, received by industry workers in the National Capital Region (NCR).

The Arroyo government continues to disregard the workers’ demand for a P125 across-the-board wage hike. In Metro Manila, for instance, although there were four wage orders from 2000 to 2005, only the last wage order increased the basic pay of workers and just by a meager P25. The wage increments were mostly in the form of cost of living allowances that not all employers are compelled to fully implement.

Workers in other regions are worse off, with minimum wages in Region IX in Mindanao, for example, as low as P196 for non-agricultural workers and P151 for non-plantation agricultural workers. In the Visayas, the lowest minimum wage is P160 for farm workers and P205 for non-agricultural workers.

Farm workers’ wages are typically 30 percent lower than what industry workers receive. The highest minimum wage for agricultural workers is set at P252 for farm workers in the CALABARZON (Region IV-A). But in reality, farm workers receive much lower than the set minimum wage, especially with labor contract schemes such as pakyawan.

Diminishing value of wages

Not only are workers’ wages measly, these are also eroded by rising prices of goods and services. The national inflation rate is pegged at 7.6 percent as of March 2006.

Last year, IBON monitored 19 oil price hikes, raising oil prices by P7.07 per liter. Oil prices increased by almost 30 percent in 2005 compared to prices in 2004. Prices of petroleum products have already increased by about 400% since the government implemented oil deregulation in 1996. From January to the first week of April 2006, there were already five rounds of oil price hikes.

Electricity and water rate hikes have also been substantial, with Meralco raising its charges by 24 percent in November 2005 compared to the same period in 2004. The implementation of the reformed value-added tax (VAT) before 2005 ended and the additional 2 percent in the Expanded Value-Added Tax (E-VAT) effective February this year added to the people’s burden.

Real wages

The unabated increase in the prices of commodities has resulted in the diminishing purchasing power of the peso and, consequently, the value of workers’ income. The purchasing power of the peso represents the value of the peso in terms of goods and services that it can buy. The Filipino consumers’ buying power has shrunk to only 73 centavos as of March 2006.

Thus, the real value of the P325 highest minimum wage is only P233.48, which means workers in the NCR lose over 28 percent of their earnings to inflation. In Region VI, IX and ARMM, the real wages of workers are lower by 24.6 percent, 24.9 percent and 30.1 percent, respectively, than their nominal wages, which are already among the lowest minimum wages in the country.

Insufficient wages for decent living

The rapid increase in prices of commodities and services has also accelerated the rise in the cost of living. IBON estimates that a family of six in the Philippines needs at least P546.80 to live decently. In the NCR, the daily cost of living has already reached P666.45. The minimum wage does not even fulfill half of the daily cost of living.

Thus, with rising cost of living and low wages in the country, more and more Filipino families are falling into the mire of poverty. IBON estimates that almost 83 percent or 8 out of 10 families are poor.

Keeping wages low is a policy of the government as it uses cheap labor to attract foreign investors into the country. This is illustrated by subcontracting schemes, which are more profitable as they depress wages, practiced by transnational corporations in the country.

Adherence to neoliberal policies imposed by multilateral creditors and trade blocs subject wages and other labor arrangements to the so-called market forces. This ultimately means wages are kept low and workers are all the more exploited and oppressed as capitalists are allowed to decide how much to give workers.

Thus, it is unsurprising that the Arroyo government and its allies in Congress continue to hinder the passage of House Bill 345 that provides for a P125 wage hike, while business groups such as the Employers Confederation of the Philippines (ECOP) and Philippine Chamber of Commerce and Industry (PCCI) push for the wage issue to be addressed by the regional wage boards. These are precisely to avoid a legislated wage increase and to undermine the workers’ struggle for a national minimum wage that fulfills their needs.

Struggle for just wages

The fight for decent wages is just and urgent as the people are buffeted by escalating prices of basic necessities that are the result of the government’s implementation of anti-people policies of liberalization, deregulation and privatization.

While the problems of workers go beyond low wages, as unemployment and underemployment reach unprecedented levels, a substantial wage hike will relieve the burden of poor families who suffer the economic crisis. IBON Features / Posted by Bulatlat

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