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Minimum wage too low?


EPIFANIO Salamanque is just an ordinary employee working in a famous shopping mall in Manila and receiving only a minimum wage.

His P456 minimum daily wage is not enough to sustain his family’s daily needs since prices of basic commodities and services constantly rising while his salary remain hard-and-fast.

With this condition, Salamanque could not prevent himself from doing extra job after his duty just to sustain the basic needs of his family and the schooling of his two children, who are now in high school.

After his regular eight-hour job, Salamanque has been working as an “extra” in a resto in Manila.

“It’s really hard for us to live with this kind of salary, we are always short with our finances,” he lamented.

Because of this, Salamanque has urged the government to at least consider increasing the minimum pay.

In a study conducted by labor group Partido ng Manggagawa (PM), the cost of living in Metro Manila has risen to P1,200 for a family of six members.

It said that the cost of living in the capital now stands at P1,217 a day or nearly triple the P456 minimum wage in the National Capital Region (NCR).

“This estimate shows that the gap between the P456-minimum wage in the NCR and the present cost of living is a yawning P761, or 167 percent of the ordinary wage,” PM chair Renato Magtubo said.

He said PM’s estimate did not include savings and social security, expenses for leisure and recreation and medical expenses.

Salamanque’s plight prompted some legislators to call for a review and eventually grant petitions for salary hike saying that the current minimum daily wage is no longer enough to sustain one’s basic needs.

Sen. Jinggoy Ejercito Estrada, who is the chairman of the Senate committee on labor, employment and human resource development said that there is a need to increase the salaries of workers because of the rising prices of basic goods and services.

The current P456-minimum daily wage, according to Estrada, is no longer enough for a worker in Metro Manila to pay the increasing power and water rates as well as health, transport, and education costs.

He said a salary adjustment would send a strong message to the international community that the country’s economic gains are starting to be felt by the people.

“This would be one of the brightest spots in our economy—that our daily wage earners can keep pace with the rising cost of living,” Estrada said.

Judy Miranda, secretary general of the Partido ng Manggagawa also called for a salary increase describing the P456-minimum wage as “starvation wages.”

“The minimum wage is not a living wage but a libing [burial] wage,” said Miranda, adding that the cost of living for a family of six in Metro Manila had already reached P1,217 a day.

But according to the National Wages and Productivity Commission (NWPC), the Philippines has the highest minimum wage in Southeast Asia.

Data from NWPC show that Metro Manila’s minimum wage of $10.74 a day is above 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.

Estrada explained that no petition for wage increase may be entertained within the 12-month period from the effectivity of the wage order.

In the case for the National Capital Region (NCR), a wage order was issued on June 3, 2012.

The senator argued that wage boards are not prohibited from reviewing the need to increase wages even before the lapse of the prescribed period.

Estrada has filed a bill, where he noted how the labor sector criticized the Regional Boards for their delayed action on petitions for minimum wage increase.

The senator has batted for a P125-across-the-board daily wage increase for all workers, saying that this will address the plight of the working class by bringing them closer to the State’s assurance of a decent wage.

But, as expected, the calls for wage hike were vehemently opposed by employers, saying it could lead to layoffs and make the country less attractive for new investments.

In opposing petitions for an across-the-board wage increase in Metro Manila, the Joint Foreign Chambers of the Philippines (JFC) has submitted a letter to Regional Tripartite Wages and Productivity Board (RTWPB).

Although many of JFC’s members are large companies and conglomerates that pay more than the minimum wage, it said that a hike in current minimum wage would have an impact on a large number of businesses, particularly micro, small and medium enterprises (MSMEs).

The group also expressed fear that any adjustment would result in streamlining their operations and pass on the cost to consumers.

“A wage increase at this time could result in layoffs, especially among MSMEs,” the JFC said in its letter addressed to RTWPB chairman for the National Capital Region Alex Avila.

In articulating its opposition, the group said the higher minimum wage could force the MSMEs resort to layoffs, which would place workers in the informal sector without having benefits or any form of safety net.

The JFC also said that the wage hike would only benefit a few people or only 5.8 percent of the workforce of 41 million Filipinos in the formal sector.

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