Employer Group’s Doomsday Scenario - a
Myth
Militant solon sees House passage of
wage hike bill
A labor leader-turned-legislator and an
expert in labor economics take issue with the labor department and an
employers group that a legislated wage increase would affect the economy
negatively.
BY ALEXANDER MARTIN REMOLLINO
Bulatlat
Will a legislated
wage hike affect the economy negatively?
Workers rally for wage hike in Davao |
A labor
leader-turned-legislator and an expert in labor economics emphatically say
no to the recent claims of the Department of Labor and Employment (DoLE)
and the Employers Confederation of the Philippines (Ecop) that a
legislated wage increase would have negative effects on the economy.
Ecop and the DoLE
recently opposed House Bill No. 345, which seeks a legislated P125 ($2.23
based on a $1:P56 exchange rate).
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HB 345, authored by
Rep. Roseller Barinaga (2D Zamboanga del Norte, Nationalist People’s
Coalition or NPC) in consolidation with Reps. Crispin Beltran and Rafael
Mariano (Anakpawis or Toiling Masses), Teodoro Casiño (Bayan Muna or
People First), and Liza Maza (Gabriela Women’s Party or GWP) was approved
by the House Committee on Labor in August last year, and is now subject to
deliberations at the plenary.
Doomsday scenario
Ernesto Bitonio, DoLE
spokesman and assistant secretary, said in a press interview Jan. 18 that
although it is within the powers of Congress to legislate a wage increase,
“the impact on the economy, especially on inflation and unemployment, must
be reviewed thoroughly.”
The labor
department’s spokesperson’s position is in synch with an earlier statement
by Rene Soriano, Ecop president, that a P125 wage increase would have
“adverse and destructive consequences” on the economy.
“Since
cost of labor is one of the factors of production,” Soriano also said,
“the mandated wage increase would cost more to produce the same quantity
of output and the increased cost is then passed on to the market.”
In an interview with
Bulatlat, Anakpawis (Toiling Masses) Rep. Crispin Beltran said:
“That (Soriano’s line) has been their argument since a quarter of a
century ago.”
The labor
leader-turned-lawmaker noted that in 1988 there had been a clamor from
labor groups for a legislated wage increase, and employers’ groups had
predicted then that the measure would damage the economy. In 1989, a bill
providing for a P25 ($0.96 based on the then $1:P26 exchange rate) was
passed into law following a series of labor mass actions. “But their
prediction didn’t come true,” Beltran said.
In a separate phone
interview, Paul Quintos, executive director of the Ecumenical Institute
for Labor Education and Research (EILER), said that employers’ groups
always create a “doomsday scenario” whenever there is a popular demand for
a wage increase. He noted in particular that business groups always raise
the specter of an increase in the prices of commodities in their
opposition to wage increase measures.
Quintos, who holds an
MSc in Development Studies from the London School of Economics (LSE) and
is a former research associate at the Philippine Institute of Development
Studies (PIDS), said that speculations about increased production costs
due to a legislated wage hike will not happen. The big corporations can
easily put up with a decrease in their profits, he pointed out.
As regards the small
enterprises, he noted that employers’ groups always profess to take their
condition into consideration when opposing a wage hike, but he also said
that it is wrong to blame workers for their plight. He said that even when
there are no demands for wage increases, small enterprises continuously
suffer from corruption, poor infrastructure, red tape, and globalization
policies that favor big multinational corporations.
Social justice and
unrest
Furthermore, Quintos
said that from the social justice perspective, it is not acceptable that
government should sacrifice the workers’ welfare for the sake of small
enterprises. “If the small enterprises are in dire straits, workers are in
a worse rut,” he explained.
Recent studies by the
socio-economic think tank IBON Foundation show the daily cost of living
for a family of six (the average Filipino family) nationwide has risen to
P492.19, as of December 2004. IBON used data from the National Statistics
Office (NSO) for its studies.
But data from the
National Wages and Productivity Commission (NWPC) also show the national
average daily minimum wage now amounts to only P202.59 – P289.60 short of
the national average for the daily cost of living for a family of six.
Asked how he expected
HB 345 to fare in the plenary given the stiff opposition from the business
sector and even the DoLE, Beltran expressed optimism that it would pass.
“Congress might pass the bill, in consideration of the possibility that
the continued stagnancy of wages would ignite social unrest,” he said.
The results of the
Social Weather Station (SWS) survey for the last quarter of 2004 revealed
a prevalence of pessimism about the economy – a phenomenon that previously
occurred only in March 2003, the beginning of the U.S.-led attacks on
Iraq; September-October 2000, the explosion of the “Juetenggate” scandal
involving then President Joseph Estrada; and 1984, a year after the
assassination of Sen. Benigno Aquino, Jr. Estrada was ousted through a
popular uprising in 2001 – thus repeating the 1986 fate of Ferdinand
Marcos, who was president in 1984.
Bulatlat
tried a number of times to contact Barinaga for his comments on the same
issue, but he could not be reached. Bulatlat
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