Low Purchasing Power Negates Recent Wage Hikes

Data on the PPP in other regions show that the value of one’s money has been eroded by as much as 32 percent in the case of ARMM. (See Table)

In the context of the recent wage hikes, it appears that the real value of the P350 ($6.83) daily minimum wage rate in the NCR is only P246.12 ($4.80). In other words, the P103.88 ($2.03) of an NCR-based worker has been eroded due to increased prices of goods and services in just a period of six years.

The situation is the same in other regions as the difference between the nominal and real value of daily minimum wage rates ranged from P53.85 or $1.05 (Cagayan Valley) to P78.26 or $1.53 (Calabarzon).

The recent wage increases are therefore too small to have a significant impact on one’s purchasing power due to increased prices of goods and services through the years. The data therefore serve to both quantify and qualify the organized workers’ call for a legislated increase in the daily minimum wage rate for private sector workers nationwide amounting to P125 ($2.44).

The organized workers’ demand has been made since August 1999 when the daily minimum wage rates ranged from P140 or $2.73 (ARMM) to P223.50 or $4.36 (NCR). Analyzing the wage increases granted by the RTWPBs from 1999 to August 2006, the NCR-based workers were provided the highest cumulative wage increase of P126.50 ($2.47), but P50 ($0.98) of this was in the emergency cost of living allowance (ECOLA) and not in the basic pay. In the case of workers in other regions, the cumulative wage increase ranged from P30 or $0.59 (Mimaropa) to P102.50 or $2.00 (Central Luzon).

Clearly, it is absolutely necessary for the government to heed the call for a P125 ($2.44) legislated wage hike if only to make the workers and their families cope with the increased prices of goods and services. Bulatlat

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