Wages may be high but…

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Filipino workers have the highest daily wages in Southeast Asia and one of the highest in the world, according to World Bank’s East Asia and the Pacific At Work report.

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The World Bank ranked the Association of Southeast Asian Nations and select economies according to the ratio of the minimum wage to average wage, as well as the ratio of the minimum wage to median wage in a particular country.

In both measurements, using 2010 data, the Philippines emerged at the top. In terms of the ratio of the minimum wage to average wage, the Philippines’s ratio was almost at 90 percent. In terms of minimum wage to median wage, the Philippines had a ratio of nearly 100 percent.

“The Philippines has the highest minimum wage, especially relative to the average wage. In 2012 the Philippines had an average national minimum wage set above the 90th percentile of countries in the world, ranked by the ratio of the minimum wage to value-added per worker,” the World Bank said.

The Joint Foreign Chambers (JFC) also said that the country had the highest minimum wage rate. It said Metro Manila’s $10.74 daily minimum wage was higher than Myanmar’s $0.52; Cambodia’s $2.03, Vietnam’s $3.15, Indonesia’s $7.46, China’s $8.08, Thailand’s $9.75 and Malaysia’s $9.75.

With the high minimum wages, the JFC pointed out that the country’s unemployment was among the highest in the Asean at around 7 percent in 2012. In that year, the unemployment rate in Malaysia was at 3 percent; Indonesia, 6.5 percent; and Thailand, 0.7 percent.

But statistical wages alone don’t tell the whole story. Because on the other hand you have to consider what those supposedly high minimum wages can actually buy here in the country in order to live decently.

Indeed, going by government statistics, Filipino workers even need to earn more. A Filipino family of five needs to increase their monthly income by 27.4 percent to get out of poverty, according to the latest data released by the Philippine Statistics Authority (PSA), which translates to an additional monthly income of P2,198 on the average to move out of the poverty level.

If we must consider the wage differentials between the Philippines and other countries, starting with our neighbors in the region, then we must also consider the cost of living differentials between us and them, and here we could find a fairly big disparity.

The cost of electricity here alone is already the highest in Asia and one of the highest in the world. It is so high a lot of manufacturing businesses simply choose to move to other countries in the region because electricity accounts for one third of the total cost of production.

Even considering the World Bank statistics, I believe the Philippines is still a cheap place to employ skilled people. The business process outsourcing industry is thriving here because we have got the talent and they come cheap.

But living in the Philippines, mind you, is certainly not cheap, not for those who actually have to earn a living and not just steal it. Most Filipinos who don’t have pork barrel allocations and huge contracts to skim off have a hard time making ends meet.

Even a friend of mine, a foreigner, compared the price of the apartment he is renting in Manila to that he was renting when he was living in New York, and he said that given the location and the size of the units, the prices are not far off. The prices for beer and coffee he pays in upscale joints abroad are also about the same if not cheaper than here in the country. (Heck, eating out is expensive even in common fast food joints because of VAT and inflation, stealth and otherwise.)

If you are a minimum wage earner or even a middle income earner with kids the cost of living here is certainly too costly.

Compare the prices of apartments you have to rent and the utilities you have to pay, not only the costly electricity but even the water prices that are much higher now after privatization, and the LPG for your cooking. Utilities eat up about 20 to 30 percent of the household budget here compared to just 5 percent or less in other countries, even the richer ones. Like I said, this is why, even in cities, people now are using firewood and uling again and are living in the dark.

What about public transportation, or if you don’t want to go through that hellish ordeal then the price of owning a car here, which is easily double than the purchase prices in the United States or Europe.

Then there’s the cost of quality education. Public education here is supposedly free but quality is not generally assured. And if you have to send your kids to private schools then prepare to lose whatever savings you have.

So far I have been writing from the perspective of a middle income or average income earner, so imagine what it would be like for the minimum wage earner.

You see it is easy to say that minimum wages here are higher than so and so but if the prices of goods and other commodities are compared with income levels, you would find Filipinos at a general disadvantage. There is no fair market pricing because the prices of goods are not compatible with the basic income of Filipinos.

Again only those with loads of money, from various sources both honest and corrupt, would not complain.

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1 Comment

  1. This article of yours hopefully will reach the minds of our do nothing Malacanang, Congress who only knows to pass laws that will benefit themselves, typical example , remember Sen. Sotto who was suit for plagiarism, they immediately pass ant-cyber crime law, and VAT by Recto which is evidently did not help many, which are prioritized for their self-interest rather than for welfare of the needy Filipinos who barely survive to make ends meet. And for this President refusal to raise the minimum wage that it will not be beneficial to many businessmen that supported him to get elected.