Tell it to SunStar: Economic benefit from higher wages

Tell it to SunStar: Economic benefit from higher wages

Unlike in business where income is retained by employers either as capital for reinvestment or as profit to sustain lavish lifestyles, workers’ wages circulate directly into the local economy, bolstering the income of neighborhood stores, as noted in a recent report published in a leading newspaper.

That is why we, Partido Manggagawa, together with the Nagkaisa! Labor Coalition, continue to press for the passage of the P100 and higher wage hike bills in both Houses of Congress despite permanent opposition from the Employers Confederation of the Philippines (Ecop).

The Senate approval of the P100 wage hike is a welcome relief. We will wait for the House of Representatives if they can walk their counterpart bills which are higher than the Senate’s.

The Lower House has yet to act on the pending P150 and P750 wage hike for workers in the private sector, as well as the P33,000 entry level monthly salary for public sector workers.

The more than P8 billion sales generated by neighborhood sari-sari stores in 2023, as reported by analytics group Packworks, reinforces our claim that a uniform increase in national minimum wage would neither kill micro enterprises nor lead to massive unemployment.

This report also disproves Ecop’s “catastrophe” scenario for small businesses once minimum wages are increased by P100, or higher. To the contrary, Packworks’ analytic research pointed to escalating sales transactions between neighborhoods from 2022-2023, coinciding with slight adjustments in minimum wages ordered by the regional wage boards during that time.

The report also found no correlation between inflation and the sales trend in sari-sari stores, belying further Ecop’s sensational “wage hike = high inflation” economic blackmail. Inflation slid to 2.8 percent in January 2024 from 8.7 percent in January 2023, based on official statistics reported by the Philippine Statistics Authority (PSA).

Considering this positive trend, we anticipate a further boost in sales transactions for Aleng Nenas from significant wage increases, citing an earlier study showing that 94 percent of consumers rely heavily on neighborhood stores for their retail needs. With approximately 1.3 million sari-sari stores nationwide, 75 percent of which are owned by women, these establishments play a crucial role in sustaining local economies.

We underscore the symbiotic relationship between workers and sari-sari stores. Workers often rely on “utang-bayad-utang-bayad” transactions with their Aleng Nenas. Thus, their capacity to pay and buy more directly impacts on the viability and sustainability of neighborhood stores.

Absent regular support from the government, it is more evident that the transfer of income from wages of formal labor is what sustains the sari-sari stores, and consequently, Aleng Nena’s self-employment in the informal economy.

By affirming the labor movement’s stance that legislated wage hikes of P100 or higher are not only justified but also beneficial to the national economy, we call for an end to fear-mongering tactics employed by the Ecop.


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