Labor Day blues

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Monday, May 5, 2014


THERE must be a better way to respond to the challenges confronting laborers than to demand that they be silent on the numerous labor violations confronting them -- nonpayment of and unremitted benefits, low wages, long hours of work among others.

For over 10 years, the demand for a P125 across the board legislated wage hike has been taken as a laughing matter. Instead of whining on the minimum pay, the government now asks, why not consider labor day as a celebration of a productive year?

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 nearly doubled the net income last year.

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The average basic pay of wage and salary workers in trade is at Php258 daily and private households at Php126 which are well below the national average of Php291 per day. In the national capital region, there was a gap of Php244 between the Php265 minimum wage and the Php509 family living wage (FLW) – placing the minimum wage at just 52% of the FLW. Broken down to the basic spending for shelter, health care, education, food and transportation, the minimum wage can hardly enable workers to live decently.

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 PhP1,434.6 billion in profits, which is only a 12% cut in their profits.

International surveys however indicate that wage hike is not a threat against investors. The productivity figures justify a substantial wage increase. Wages make up only around 10 percent of the production costs, thus the threat of inflation is exaggerated. Another study conducted by the Asian Institute for Management (AIM) shows that the country's primary strength is centered on the labor market, particularly the abundance of skilled labor, the availability of competent senior managers and the wealth of finance skills available.

Other countries in Asia have attracted greater foreign direct investments while offering higher wages to the labor force. This underlies the point that market size, including purchasing capacity is an important consideration for investors.

By raising the spectre of an imbalance and loss of jobs, government officials continue to cuddle some businesses from its responsibility of providing adequate pay based on their profit from labor. By failing to protect domestic and overseas workers, it has shown that it cannot facilitate and sustain growth nor make development equitable.

It can respond better. It should do its job. Email comments to roledan@gmail.com

Published in the Sun.Star Davao newspaper on May 06, 2014.

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