While inflation in April did go down to 2 percent from 8 percent in the same period last year, this only indicated that the rate that prices were going up had slowed but prices of goods and services still remained high. In fact, the cost of living continues to escalate.
BY IBON Foundation
LABOR WATCH
Posted by Bulatlat
Vol. VII, No. 19, June 17-23, 2007
Various business groups have claimed that there is no basis to adjust the minimum wage because the erosion of the peso as of April 2007 was very insignificant. But it obscures the point that workers’ wages can no longer keep with high and rising prices, according to independent think-tank IBON Foundation.
While inflation in April did go down to 2 percent from 8 percent in the same period last year, this only indicated that the rate that prices were going up had slowed but prices of goods and services still remained high. In fact, the cost of living continues to escalate.
IBON estimates that the minimum daily cost of living for a family of six as of April 2007 was P679.50 ($14.64 at an exchange rate of $1=P46.39). But the daily minimum wage in Metro Manila was just P350 ($7.54) – P300 basic plus P50 cost of living allowance – or just over half of the cost of decent living.
The real value of workers’ wages had also seriously been eroded. The purchasing power of the peso in Metro Manila, or the amount of goods and services one peso can buy, had fallen to P0.70 ($0.0150) in April from P0.72 ($0.0155) last year. This means that over the past year, a worker has lost P2 ($0.043) of actual buying power for every P100 ($2.15) he or she earns. But between April 2005-2006 a worker actually lost P5 ($0.107) of actual buying power.
This loss in buying power underscores the urgency for a wage hike, particularly in the light of workers’ increasing productivity. Workers’ productivity grew to P9,560 ($208.018) in the first quarter of 2007 from P9,265($199.71) in the same period last year. IBON Foundation/posted by(Bulatlat.com)
