Shortchanging workers

LABOR groups were disappointed when the President thumbed down the proposal for a P125 wage hike, saying it would be too costly for the employers. Instead, he ordered the Regional Tripartite Wages and Productivity Board to expedite rulings on petitions for salary increase.

The President said that if the P125 legislated wage hike would be adopted, an estimated 527,000 people could lose jobs. How can the country survive if business close shop because of the proposal from the labor sector?

“If we will go farther from them, who among foreign investors will take a risk and invest here? Because in Cambodia, it’s $2, here it’s $9. It might delay our economy’s growth even more,” he quipped.

He also expressed reservation on a security tenure bill, which aims to end the contractualization of labor. The President said he had to balance all interests especially that only 1.8 million employees were expected to benefit from the scrapping of contractualization while 10.3 million would lose their jobs.

Labor groups were unimpressed with the justification on the opposition to a legislated wage hike. The country’s wage earners entitled to a 125-peso daily wage hike numbered only 15.6 million, according to the data from the National Statistics Office.

Despite the crisis, the combined net income of top 1,000 corporations in 2010 nearly doubled the PhP416 billion net income in 2008. Experts argue that the total cost of the proposed wage hike of P125 will only be PhP194.9 billion. When subtracted from total profits, this will still leave establishments with P1,434.6 billion in profits, which is only a 12% cut in their profits.

In 2009, all the establishments in the country of all employment sizes had combined profits of P1,629.5 billion and 3.94 million employees (2009 Annual Survey of Philippine Business and Industry (ASPBI) of the National Statistics Office).

The computation cited by the President represents the entire labor force, including government employees and non wage earners.

On May 1, the President spoke for the business interest. By defending contractualization to keep labor costs low and attract investors, the government maintained its stance for big businesses and corporations.

The President forgot that a fair minimum wage is a sound investment.
Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity and improving product quality, including customer satisfaction which in turn props up company reputation.

It will provide a boost to local economies where businesses and communities will benefit as low-wage workers spend their much-needed pay raise in the community where they live and work. This is in contrast to the current low pay that creates a vicious cycle of high turnover and low productivity which is bad for workers and businesses.

But in the true fashion of defending the business groups and in providing excuses, the people’s servant and representative does not want to hear any of these.

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