Globalization –
not Wage Hike – is the Culprit for Job Losses
Globalization has
resulted in the destruction of domestic and export manufacturing
enterprises, since they cannot compete with cheaper dumped products in
the local markets nor in the global export market against manufacturing
powerhouses such as China, and this is why the country is shedding jobs.
BY IBON
FOUNDATION, INC.
Posted by
Bulatlat
Independent think-tank IBON Foundation belied claims by the National
Economic Development Authority (NEDA) that the proposed P125
across-the-board wage hike currently pending in Congress would result in
the loss of 1.1 million jobs.
IBON research head Sonny Africa last
week said that since 1995, the year when the Philippines became a member
of the World Trade Organization (WTO) and began liberalization of the
economy in earnest, local establishments have ceased operations or
retrenched workers mainly due to financial reasons (i.e. lack of
capital, high production costs) and reorganization or downsizing of
firms.
Only a few firms have reported closing
down or resorting to retrenchment as a result of increases in the
minimum wage. (See Table) From 1995 to 2006, there were nine wage
increases in the National Capital Region.
Table.
Establishments Resorting to Permanent Closure/Retrenchment - Workers
Affected (1995-2005)
Product Demand
178,341
Lack of Market / Slump in Demand
164,123
Uncompetitive Price of Products
10,395
Competition from Imports
3,823
Financial
214,854
High Cost of Production
53,715
Lack of Capital
54,964
Peso Depreciation
9,583
Financial Losses
103,372
Others (Economic crisis)
15,583
Organization
209,810
Reorganization /Downsizing /Redundancy
170,958
Change in Management / Merger
33,789
Lack of Raw Materials
24,976
Minimum Wage Rate Increase
3,044
Others
25,990
Total
660,266
Source: Department of Labor and
Employment
Note: Details may not add up due to
rounding
Globalization has resulted in the
destruction of domestic and export manufacturing enterprises, since they
cannot compete with cheaper dumped products in the local markets nor in
the global export market against manufacturing powerhouses such as
China, and this is why the country is shedding jobs, Africa said.
Africa also hit the Department of Labor
and Employment (DoLE) for asking Malacañang to veto the wage hike bill.
“It is ironic that the DoLE, which
should be defending workers’ rights, is instead pushing for a rejection
of a proposed bill that will give the workers respite from the
sky-rocketing cost of living,” he said. Posted by Bulatlat
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