Labor group says economic aftershock plummeted real wages

NEGROS Occidental-based labor group General Alliance of Workers Associations (Gawa) reported that the income of workers in Western Visayas has plummeted by 20 percent in terms of real wages.

Its secretary-general Wennie Sancho said as a result of economic aftershock brought about by the coronavirus disease (Covid-19) pandemic, there was an extreme drop in the real wages of workers in the private sector in the region.

Citing the latest Regional Economic Profile issued by the Philippine Statistics Authority (PSA), Sancho said as of August 2020, the consumers' price index (CPI) is at P125.7.

The CPI measures the changes in the price level of goods and services that most people buy.

The figure is higher than P121.7 in 2019 while the inflation rate, which is the percentage change in CPI is at 2.7 percent, also higher than 2.4 percent last year.

"The same data shows that the nominal wage or wage measured in the amount of money, which is currently P395 per day for commercial and industrial workers, was drastically reduced to P314.24 in terms of real wage," he said, adding that this is the actual purchasing power of the peso.

The decrease is P80.78 per day or P2,100 per month.

Sancho, also the labor representative to the Regional Tripartite Wages and Productivity Board (RTWPB) in Western Visayas, said the purchasing power of the peso is the equivalent value of goods and services that a peso could buy at current prices.

The labor leader said the continuous decline in the real value of the minimum wage would impact on the loss or erosion of the workers' purchasing power.

He said the lower value on the workers' purchasing power denotes a diminished capacity of workers to have access to basic goods and services.

"This diminution of wages is detrimental to the economic survival of the workers and their families in the midst of pandemic," Sancho added.

To protect the purchasing power of the workers, the labor group asserted that the government should control inflation rather than reducing the already low standard of living afforded by the minimum wage.

A 10 person erosion on the value of the purchasing power of the nominal wage can be used as a warning signal to the Regional Wage Board to review whether the prevailing minimum wage still serves its purpose of protecting the vulnerable workers from the vagaries of the market, it said.

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