KILUSANG MAYO UNO

TAGAPAMANDILA NG TUNAY NA UNYONISMO

No. 63 Narra St., Brgy. Claro, Proj. 3, Quezon City tel / fax no: 4210986 email: kilusangmayouno@gmail.com, website: www.kilusangmayouno.org

Some Facts: Workers Call for a Significant Wage Hike

The current minimum wage in the National Capital Region is P404. Amidst widespread calls for Pres. Benigno Noynoy Aquino III to implement a significant wage hike, the NCR wage board granted a mere P22 Cost of Living Allowance last May. A COLA is not part of workers basic pay and therefore of computations of overtime pay, retirement benefits and other benefits. It will remain an allowance until it is integrated into workers minimum wage. The wage level in the NCR is the highest in the country, despite studies showing that cost of living in other regions may be the same as, or even higher than, that obtaining in NCR. The prices of petroleum products, for one, are higher in the provinces than in Metro Manila. In a study released last April, independent think-tank Ibon Foundation says that the current minimum wage in the NCR is just 2/5 of the estimated average family living wage (FLW) of P988. The said proportion marks a deterioration: in 2001, the proportion between the minimum wage and the average FLW is . In its latest survey on hunger conducted from August to October 2011, the Social Weather Stations revealed that one out of five households experienced extreme hunger in the said period. This is the highest incidence under the Aquino government and second only in severity to the highest incidence under the Arroyo government in December 2009. The 1987 Philippine Constitution, in Article XIII, mandates that Filipino workers shall be entitled to a living wage. It also recognizes the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth. It also says that Congress shall give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities, by equitably diffusing wealth and political power for the common good. Ibon says that measured according to 2000 price levels, the P404 minimum wage in the NCR is just P234.90 in real terms lower than the real value of the minimum wage during the start of the Arroyo government which was at P258. Ibon says that at least a P40 wage increase is necessary to at least restore the minimum wage to the level at the start of the Arroyo government. According to Ibon, while Gloria Macapagal-Arroyo ruled the country the longest after 1

Ferdinand Marcos, her government approved the lowest increase in the wages of workers, measured in real terms. The P5.00 real-wage increase in NCR under Arroyo compares unfavorably with real-wage increases implemented under former Presidents Aquino (P82), Ramos (P16) and Estrada (P22) The Aquino government witnessed increases in the prices of petroleum products, in toll fees in expressways and in electricity rates. More than their direct impact on workers households, these increases have surely hiked the prices of basic goods and services, making it more difficult for workers families to avail of these. In another study released last April, Ibon says that a P125 across-the-board wage hike amounts to just a 17.3% reduction in the profits of companies with more than 20 employees. Ibon based its research on the 2008 Annual Survey of Philippine Business and Industry of the National Statistics Office. This belies capitalists claim that a significant wage increase will cause many businesses to close shop and layoff many workers, as well as the governments claim that such a wage hike will cause inflation to rise. Former Pres. Arroyos economic adviser Joey Salceda admitted that the profits of the countrys Top 1,000 corporations increased by 21% yearly while their return on equity of investments jumped by 15% yearly since Arroyo became president. He also said that of the P3.1 Trillion total earnings of the countrys Top 1,000 corporations, only P1 Trillion was reinvested with the P2.1 Trillion pocketed as dividends or earnings of stockholders. Small Filipino businessmen concede that it is not wage which is eating up a huge portion of their profits, but energy cost. This is verified by a study by Australia-based think-tank International Energy Consultants showing that the electricity rates collected from households in the Philippines last year are the highest in Asia. Small Filipino businessmen say that labor costs do not exceed 10% in their overall production costs. In its Prices and Earnings research released last August 2011, UBS (formerly Union Bank of Switzerland) compared price levels, wage levels and purchasing power in 72 cities and found out that Manila ranks second lowest in the price levels, second lowest in the wage levels, and third lowest in purchasing power. Before the increases in the prices of basic goods and services this year, the International Labor Organization came out with a report last December 2010 saying that wage levels in the country are among the wage levels in Asia that were severely reduced. This means, said the ILO, that wages decreased in relation to total income, that the disparity between the growth in productivity and in wages has increased, that there is growing income inequality, and that the purchasing power of workers has been severely eroded. The countrys Regional Wage Boards have been a complete failure in giving workers a significant wage hike. The highest wage increase that they have granted is under former Pres. Joseph Estradas government, a meager P26.50 in November 2000. Workers 2

allege that they were in fact created, under the Wage Rationalization Act of 1989, to reduce the real value of workers wages through minimal wage increases. Estimates show that among the countrys workers, only 5% are unionized, and the percentage of those who have a Collective Bargaining Agreement with their capitalists is even smaller. CBAs, therefore, cannot be relied upon to provide workers with a significant wage hike. Filipino workers call for a P125 across-the-board wage increase, a form of a significant wage hike, has been made since 1998. It will provide workers an immediate relief from the rising prices of basic goods and services. It will cover non-unionized and even contractual workers.