THE Regional Tripartite Wage and Productivity Board of the National Capital Region (RTWPB-NCR) recently approved a P10-a-day increase in the minimum wage of Metro Manila workers and P15 additional cost-of-living-allowance, thereby bringing the new basic wage to P451 and the new minimum wage to P466 in the region.
Labor groups, who have previously asked for P83 to P125 wage hikes, are naturally disappointed.
The Trade Union Congress of the Philippines, which I chair, for instance filed for an P83 per day increase to cover the rising food, fuel and utility costs.
As it is, the new wage hike would barely be enough to cover the contemplated fare increases in the light train fares.
The P10 adjustment is the lowest to have been ordered for Metro Manila since minimum wages began being set by the regional tripartite wage boards per region in 1990.
The previous 17 wage orders mandated raises ranging from P12 to as much as P30 to either the basic pay or the COLA. For instance, last year’s increase in COLA was for P30 per day.
The Employers’ Confederation of the Philippines (ECOP) had said the bigger wage hikes demanded by the labor groups would result in company closures and job losses.
ECOP President Edgardo G. Lacson even said that the P10 adjustment should have been only P7 and noted that non-compliance carried steep penalties for employers.
Employers, businesses and even economists always say that increasing the minimum wage would lead to unemployment but such a scare scenario never actually materializes.
Unemployment numbers have more or less remained the same after wage hikes have been granted.
Our experience has shown that wage hikes have negligible effects on employment because our economy is strong enough to accommodate them. Because of our country’s stable economy, firms can actually employ more workers as there is more demand to produce goods.
Actually, a number of industries continue to boom and grow profits. They can definitely afford to grant wage increases. And under the law, the upward revision of wage rates is possible along industry lines.
Offhand, slump-proof industries such as electricity and water distribution can readily pay for higher wages.
Telecommunications, mining, banking, and even media and advertising could also manage a pay raise.
Telecommunications is still being buoyed up by the surge in mobile telephony and broadband services, while mining as a whole has been enjoying years of bullish commodity prices.
Media and advertising just got a big boost due to election-related spending.
Now if there are two or three firms in these industries that are losing money because of exceptional circumstances, they can always justify their cases and ask for a possible exemption from wage increases.
Local research group IBON in a news release last April noted that the increase in profits of the country’s biggest corporations is far exceeding the growth in their workers’ wages.
“Data from the Philippine Stock Exchange (PSE) shows that the combined net incomes of listed firms grew by 18 percent to P377.12 billion in January to September 2012 from P319.97 billion in the same period the previous year. Another study showed that in 2012, several listed firms posted a 35.9 percent increase in earnings.”
But IBON said while big business saw its income and profitability grow, the increase in the wages of its workers was insignificant.
“For instance, the average daily basic pay in agriculture increased by only 4 percent in 2010-2011, but the estimated daily net income of top 1,000 corporations in agriculture went up by 821 percent. In mining, average wages increased by only 3.8 percent while mining firms recorded a 134 percent increase in profits. Such was also the case with most of the so-called growth sectors: electricity, gas and water; wholesale and retail trade; and real estate, renting and business activities.”
IBON added that corporate income and profitability are growing more under the Aquino administration. From 2010-2011, for instance, the top 1,000 corporations gained an average annual income of P780.02 billion compared to an average of P421 billion yearly during the previous administration. The profitability of big business under the Aquino administration is also higher at an average of 11.1 percent annually.
“On the other hand, the International Labour Organization (ILO) ranked the average monthly wages in the Philippines as the third lowest among 72 countries in the world, at US$279 (or some Php11,700). Philippine wages only surpassed average wages received in Tajikistan and Pakistan. This is despite increasing workers’ productivity, which increased by 5.37 percent in 2011-2012. The overall daily basic pay, meanwhile, increased by a mere 3.6 percent.”
According to IBON, big business can afford granting a sufficient wage increase, especially if they accept a cut in their substantial profits. A wage hike will provide immediate relief to workers and their families, especially amid soaring prices and continued erosion in the real value of workers’ wages.