A wage hike is urgent amid soaring rice and food prices, rising transport costs, and power and rate hikes, and businesses are fully able to grant the wage hike demanded by workers, according to independent research group IBON.
BY IBON FOUNDATION
Posted by Bulatlat
Vol. VIII, No. 13, May 4-10, 2008
A wage hike is urgent amid soaring rice and food prices, rising transport costs, and power and rate hikes, and businesses are fully able to grant the wage hike demanded by workers.
The increasing labor productivity of local workers, or the ratio of national output to employment, has been steadily increasing over the past decade. IBON research head Sonny Africa pointed out that between 1999 and 2006, labor productivity has increased by 56.3 percent in nominal terms and 13.1 percent in real terms (taking inflation into account). This shows that employers could afford to grant the P125 ($2.95 at an exchange rate of $1=P42.34) wage hike, which would necessarily trim their profit margin but will certainly not push them to bankruptcy.
Africa said all that employers have to do is accept a cut in their profits or tap their accumulated earnings. In these critical times for the majority of Filipinos who remain poor, Africa pointed out that businesses can even cut back on their expenses that are basically unproductive and are directed at competing with each other in the frantic race for an increase in their market share, and divert these to their workers instead. Such expenses, he said, include extraneous marketing and promotions expenses.
As it is, the average daily basic pay of the country’s wage and salary earners even falls far short of the minimum wage. A wage hike will put additional pressure on employers to pay higher wages, which is aside from how the government should also work to ensure that workers are paid the proper minimum wage.
As of the middle of 2007, labor force survey data on wage and salary workers found that laborers and unskilled workers were getting paid just P153 ($3.61 at an exchange rate of $1=P42.34) per day, service workers and shop and market sales workers were getting P227 ($5.36), trades and related workers just P262 ($6.18), and plant and machine operators and assemblers only P287 ($6.77). These occupations account for 58 percent of all jobs in the country.
The minimum wage also falls far short of the family living wage. For instance, the minimum wage in the National Capital Region is P362 ($8.55) per day but the family living wage for a family with five members is P672 ($15.87) per day – or a shortfall of P310 ($7.32) per day for a family with the average of five family members.
Africa added that the real value of families’ earnings has been falling steeply since the start of the Arroyo administration. While nominal family incomes increased 19 percent between 2000 and 2006, according to the latest Family Income and Expenditure Survey (FIES), the price of goods however increased 38 percent. Soaring prices more than off-set seeming increases in family incomes and, in effect, the average annual family income of P171,924 ($4,060) in 2006 was worth P20,400 ($481) less than in 2000.
Uncontrollable unemployment and dismally poor wages are among the most important reasons for the increase in poverty in recent years, said Africa. In itself these are solid reasons for a wage hike of at the very least P125 ($2.95) as demanded by organized labor.
Inflation has drastically eroded the value of this however and P125 in 2000 is worth just P64 ($1.51) today, he said.
Africa added that the wage hike must be legislated and across-the-board since all workers nationwide are affected by the skyrocketing prices of goods and services. He pointed out the regional wage boards have only served to confuse parallel conditions of workers across regions.
Further, a legislated wage hike would have the strength of law behind it and is more enforceable while allowing for fewer exemptions. Posted by Bulatlat