ANALYSIS
Macapagal-Arroyo’s Wage Hike Proposal is `Anti-Poor’

Any wage hike results in increased purchasing power for workers. However, it can be anti-poor if it does not take into account the interests of those who are getting less and benefits those who are getting more. On the other hand, any mandated increase in the salary of overseas Filipino workers (OFWs) is done in the name of the almighty dollar.

BY DANILO ARAÑA ARAO
Bulatlat

While the Macapagal-Arroyo administration opposed the P125 ($2.55) across-the-board increase in the minimum daily wage of the 12.46-million private sector workers, it is, however, pushing for the salary increase of 1.5-million government employees. At the same time, it wants home caregivers abroad to have an increase in salary from $200 to $400 monthly. How does one make sense of this contradiction?

Budget Secretary Rolando Andaya, Jr. last week said President Gloria Macapagal-Arroyo is ready to certify as urgent a bill that would “increase the salaries of about 1.5 million government workers this year.” He also said that P10.3 billion ($210.4 million) is needed for the wage hike bill in 2007.

The entire wage hike plan that extends up to 2010, however, will require between P90 billion to P100 billion ($1.8 billion to $2.0 billion). Clearly, the planned salary increase for government employees will be done not only this year but in the following years until 2010.

This may sound like welcome news at least for government employees, but the Macapagal-Arroyo administration is targeting a 10-percent, across-the-board salary increase for them this year. The increase, therefore, will not be in absolute figures (for example, the P3,000 or $61.29 monthly increase being demanded by organized government employees) but according to one’s basic rate.

Under the Salary Standardization Law’s (SSL) salary scale which was last revised in July 2001, the lowest-paid government employee covered by SSL has a basic monthly salary of P5,082 or $103.82 (Salary Grade or SG 1, Step 1). Government employees whose positions fall under SG 1-1 like utility workers will only get an additional P508.20 ($10.38) monthly if their pay were increased by 10 percent.

On the other hand, the highest-paid government employee covered by SSL is the Philippine President who gets a monthly salary of P57,750 or $1,179.77 (SG 33). A 10-percent increase will therefore translate to an additional P5,775 ($117.98) in the monthly salary of Mrs. Macapagal-Arroyo.

The planned 10-percent salary increase therefore discriminates against those who are currently getting less and is inherently biased for those belonging to the higher salary grades. The militant workers’ demand to increase salaries in absolute terms – P125 ($2.55) in the daily wage of private sector workers, P3,000 ($61.29) in the monthly salary of government employees – seeks to remove this discrimination and bias by giving equal amounts to all workers.

Increase for home caregivers abroad

Meanwhile, the Philippine Overseas Employment Administration’s (POEA) governing board increased the minimum salary of departing Filipino home caregivers to $400. According to news reports, the POEA “also raised the minimum wage requirement to 25 years old, prohibited the collection of placement fee and required a prequalification certificate.”

POEA Chair Rosalinda Baldoz said that through this new policy, Filipino caregivers would “upgrade their skills and eventually graduate from their grueling 24/7 work week.”

Despite the Department of Labor and Employment’s (DoLE) projection that the new policy will result in a 40-percent drop in yearly deployment, Labor Undersecretary Danilo Cruz said that the new requirements “would bring in more benefits for overseas Filipino workers (OFWs) in the domestic sector.”

He added that the drop “could be easily compensated by new markets that need skilled and professional workers.” Cruz said that new labor markets have opened in Canada, Libya, Spain and Taiwan, while Australia and New Zealand are “on the pipeline.”

Analyzing data on migrant labor, the new policy proves to be a good solution for the Macapagal-Arroyo administration to ensure a steady increase in OFW remittances. POEA data showed that in 2006, the number of deployed workers totaled 1.09 million of which around 300,000 were domestic helpers.

Given that the 300,000 caregivers currently earn an average of $200 monthly, they therefore earn a combined total of $60 million monthly. Even assuming a worst-case scenario that 40 percent of them would be laid off as a result of the new policy, a $400-monthly salary for the remaining 180,000 caregivers means an accumulated $72 million.

OFW remittances – amounting to $14 billion in 2006 – are therefore expected to further increase as more Filipinos strive to become domestic helpers abroad due to the promise of higher pay.

One can therefore expect that the male-female ratio of OFWs –59.26 percent, female; 40.74 percent, male – will remain. Women, after all, would prefer to go abroad as caregivers where they can earn 56 times more than a minimum wage earner in Metro Manila.

The institutionalization of labor migration is detrimental to the local economy since economic growth becomes dependent on revenues from abroad like OFW remittances and people are wont to go abroad instead of work for domestic industries.

The Macapagal-Arroyo administration’s current policies on wage hike show that it does not have the interest of the rank-and-file in government agencies in mind, but only the officials who are already getting higher salaries. While overseas Filipino caregivers can benefit from an increased salary of $400 monthly, their interests are merely incidental to the overriding concern of propping up OFW remittances in the years to come. Bulatlat

(Computation of dollar equivalents is based on a peso-dollar exchange rate of P48.95 per U.S. dollar.) Bulatlat

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