Certainly low labor costs enable non-poor to live well very cheaply
Times Reader Arthur Keefe—reacting to my article on our failure to instill inclusive growth—suggests that one reason we in this country have tolerated so much poverty is that “the middle and upper classes benefit greatly from the very low cost of labor, which enables those with money to have a high standard of living very cheaply. Thus it is not in their interest to remove poverty and low wages—at least not in the short to medium term. The downside is having to live in gated communities and employ armed guards to protect their lifestyle!” (Times, August 9, 2014)
Expats love Manila living
That expatriates love Manila for its living costs we well know. I know of an American couple who’ve fled to Manila from Israel’s living costs. The two have rented out their modest flat in Tel Aviv, and live in Makati as rentiers—lazy and content—entirely on its proceeds.
I too appreciate the difference living in Metro Manila makes: I spent my first decade of being married as a journalist in Hong Kong and Singapore. I washed dishes and swept the floor; heated baby bottles and changed diapers. In a word, I did my husbandly share of chores—customary in developed countries—that the lowliest Metro Manila salariat would deem below his masculinity.
And I must admit I eased back into the comforts Manila offers without a thoughtfor Keefe’s “army of poorly paid laborers” that enables even our modestly moneyed to live high off the hog in a country of epic inequality.
Big people, small people
Income breakdowns of national society reveal a tiny upper class, a small middle class and a large underclass of the ‘non-poor’ and the poor.
The survey group Pulse-Asia distinguishes five income groupings in national society. Classes ABC together equal 7 percent; D 67 percent, and E 25 percent.
Class D breaks down further into two sub-categories. Below a ‘true’ middle class of some 19 percent, there is a sub-category of the precariously ‘non-poor,’ making up 48 percent of national society, that subsists just above the poverty line—hostages to inflation and financial crisis, the loss of jobs, illnesses and deaths, and other life misfortunes.
Despite recent episodes of high growth, roughly half of all Filipinos describe themselves as “poor” in SWS surveys; official statistics place their number at some 25 percent.
In 2009, 13.2 percent of all Filipinos still lived on the equivalent of one US dollar a day—the United Nations’ definition of absolute poverty. This was higher than Indonesia’s 7.7 percent and even Vietnam’s 8.40 percent. By then, Malaysia and Thailand had virtually wiped out absolute poverty from among their peoples.
Missing the bus
Not just once, but at several turning points, we Filipinos missed the bus to modernization.
In the 1950s, we fumbled the chance at agrarian-tenure reform on which our neighbor-economies built their industrial strategies.
Between 1965 and 1990, we missed the economic “miracle” that made East Asia the fastest-growing region.
Now our country is defaulting on its 2015 commitment for poverty reduction under the UN’s Millennium Development Goals.
Meanwhile, our income inequality has become East Asia’s worst—because growth is so narrowly based. Metro Manila and its satellite regions—Central Luzon and Southern Tagalog—produce 65-70 percent of domestic output and income.
Our economy’s fastest-growing components—overseas contract work and its domestic counterpart, business-process outsourcing (BPO)—are “enclave economies,” with very few organic linkages to the domestic economy.
Consensus or coercion?
Given our sorry growth record, it does make sense to ask: Are our poor poor because it suits us to keep them that way?
The eminent Jesuit sociologist John J. Carroll suggests that, for Filipinos, national society is less a community united by a common understanding of what the world and society are all about than a stark structure of power.
The possession of economic and political power has much more to do with who gets what than do society’s values or the common good.
And Fr. Carroll fears that special interest groups have shaped policy-making for so long that inequality has become embedded in the whole of national society.
For our neighbor-states beset by multiple threats to their sovereignty, inclusive growth was a survival strategy. We Filipinos—secure in our geographic isolation and sheltered by the American umbrella during East Asia’s most turbulent period—could afford to safely disregard the plight of our powerless.
Even two successive insurgencies between 1950 and 1970 did not disturb our complacency. But how much longer can we really keep things as they are?
What are we to do?
The lessons are all around us; the lessons are plain and simple. Alleviation of durable mass poverty of the kind we have—of poverty passed down from generation to generation—cannot be just a byproduct—merely an incidental benefit—of growth that swells corporate profits first of all.
“Trickle down” does not work well enough and quickly enough. Not only is there a short limit to “spread effect.” Indeed its backwash disadvantages regions farther away: the growth pole sucks away their stores of capital and their most entrepreneurial people.
We must make growth work deliberately for the poor. And in my view leaders, political parties and governments succeed best when in their policies they combine the individual initiative that capitalism stimulates with socialism’s original compassion for those whom development leaves behind.
Finding our way toward this new social contract will be long and difficult. But it is work we cannot forego; it is work we cannot shirk; else we end up like Tolstoy’s hypocritical do-gooder, who was willing to lighten the poor man’s load by all possible means—except by getting off his back.