With the increases in the prices of rice, bread, pork, electricity, oil, liquid petroleum gas, and other basic commodities, the need for and the urgency of wage increases are no longer debatable. The only question is how and how much.

BY BENJIE OLIVEROS
ANALYSIS
Bulatlat
Vol. VIII, No. 13, May 4-10, 2008

The Arroyo government flatly rejected any legislated wage increase. Instead it called for a wage increase the amount of which would be set by regional wage boards. The Arroyo government also decided on a 10 percent increase in the salaries of government employees.

Some business groups, such as the Makati Business Club recognized the need for wage increases. Others called for non-wage benefits. Mahar Mangahas and the May 1 editorial of the Philippine Daily Inquirer cautioned against a legislated wage increase. In its stead, they proposed that wage increases be determined by the labor market; and for government to influence the market price of labor, it suggested that salaries of government employees be increased accordingly.

A very urgent demand

With the increases in the prices of rice, bread, pork, electricity, oil, liquid petroleum gas, and other basic commodities, the need for and the urgency of wage increases are no longer debatable. The only question is how and how much.

Militant labor groups represented by the Kilusang Mayo Uno (KMU or May 1st Movement) have been demanding for a legislated P125 ($2.95 at the May 5, 2008 exchange rate of $1=P42.34) across-the-board increase while government employees under COURAGE are pushing for a P3,000 ($70.85) monthly increase. In fact, KMU first demanded for a P125 increase in 1999 when the living wage for a family of six, as set by the National Wages and Productivity Commission, was at P379.51($9.71 at the 1999 average exchange rate of $1:P39.09) and the minimum wage was at P193.67 ($4.95). It could have brought the daily minimum wage to P318.67 ($8.15), just P60.84 ($1.55) short of the family living wage.

But it was not to be.

The folly of regional wage boards

Wage increases granted by the regional wage boards did approximate P125-P168 ($2.95 to $3.96 at the May 5 exchange rate) in the National Capital Region – but it came in trickles during the last 8 years, and barely compensated for the increase in the cost of living.

According to the NWPC, the family living wage as of March 2008 is already at P770 ($18.18), representing a 102 percent increase in the cost of living. But the highest regional minimum wage at present is P362 ($8.55), for workers in the National Capital Region (NCR), or a mere 86 percent increase from the minimum wage in 1999. This did not even equal the family living wage in 1999. And even if both husband and wife works and earn the minimum wage- which majority of Filipino workers do not receive – their combined income would still not even equal the living wage. Data from IBON Foundation revealed that laborers and unskilled workers were getting paid only P153 ($3.61) 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 receive P287 ($6.77). These already account for 58 percent of all jobs in the country.

So workers are even worse off now than in 1999.

Regional wage boards supposedly grant increases with due consideration to the local cost of living. But the irony of it is that the region with the highest daily family living wage at P1,186 ($28), the Autonomous Region of Muslim Mindanao, has the lowest wage at P200 ($4.72). Apparently, the amount of increase a region gets from their respective wage boards is determined not so much by the cost of living but by the strength of the local labor movement, and inversely, the power of local capitalists.

That is the folly of leaving it to the regional wage boards to determine the amount of wage increases.

The illusion of the labor market, the essence of wages

There are two fundamental flaws in the proposal to let the labor market determine the amount of wage increases to be given to workers.

First, this presupposes that the law of supply and demand in the labor market would determine the ideal price of labor. How could the law of supply and demand work for the Filipino working class when around 30 percent of the labor force is either out of work or underemployed? Even in advanced capitalist countries such as the U.S. the law of supply and demand in the labor market is already skewed because labor-intensive production processes are already spread out in capital-strapped Third World countries, which are desperately competing for foreign investments. How could it then work in backward, agricultural, and pre-industrial economies such as the Philippines where the unemployed and underemployed workers, and landless peasants are in abundance? (This also explains the folly of the “trickle-down” effect.) The employment situation is so bad that it forced 10 percent of the population to seek gainful employment abroad.

Second, the demand for wage increases is not about the need to adjust the price of labor, it is about survival. That is what wages are all about in the first place. It is based on the “living wage” because it is supposed to provide for the subsistence of the worker and his/her family. For production and commerce to continue, the workers should have food, clothing, a roof above their heads, and should be able to bear and raise children. And these are supposed to be provided for by his/her wages. Otherwise, how can the working class work if they are too weak with hunger, if they do not have anything to wear, and are sick because of being exposed to the elements? Furthermore, who would replace them if they do not have children? Thus, providing the workers with decent wages is not even about justice, it is about keeping a virtual slave alive to be able to work another day. And the irony of capitalism is that it is slowly killing the very source of its profits and capital: the worker. In the process, it is also constricting the market for its products because as it increasingly depresses wages, it also causes the purchasing power of the majority of the people to fall.

Immediate relief

Granting the workers a P125 daily increase would only mitigate the effects of the price spikes. It would bring NCR wages to P487 ($11.50), still P204 ($4.81) short of the living wage. And workers would still be in a worse off situation than it was in during 1999, albeit, to a lesser degree.

The business community says that it could not afford a P125 across-the-board increase. If they really could not afford to give such an increase, it is not the fault of the working class. Workers are only asking for wages that would enable them to survive. It is then the fault of the economy and the Arroyo government.

How true then is the supposed “unprecedented growth” in the economy if providing workers with a decent wage would cause companies to fold up? How can we say that everything is well with the economy if majority of the Filipino people – comprised by middle to low-level employees, workers and peasants – could barely survive and cope with the increases in the cost of living? The question now becomes, with the debilitating price spikes and the refusal of the Arroyo government to control it, to remove the RVAT to bring down prices, and to grant a substantial wage increase, how can we then survive another two years under the same dispensation? (Bulatlat.com)

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