Thads Bentulan caused a stir some years ago with his proposal for what he called Hyperwage, the benefits that would arise from immediately raising salaries tremendously. Recently, he sent me a PowerPoint presentation involving the comparison of rice prices (as of April 20) in three places: Hong Kong, Singapore and the Philippines. He did an analysis of these prices, from the point of view of domestic helpers and janitors in these countries.
He picked Singapore and Hong Kong for several reasons. First of all, they?re places close to us. Second, they have no natural resources and almost everything, including rice, is imported (and, he adds, neither Hong Kong nor Singapore have any plans of being self-sufficient when it comes to rice production). Third, they?re places where we assume the cost of living is very high. And finally, they?re small countries, where the laws of supply and demand work, because they ?don?t have much excess manpower.?
He explains that he decided to focus on domestic helpers and janitors because domestic helpers in Hong Kong and Singapore aren?t local citizens but imported laborers (often Filipinas) who don?t enjoy as much government protection as the citizens of those countries. There is, therefore, a wide gap between the income of domestics and janitors (who tend to be citizens of those countries). Janitors, he believes, are a better indicator of the affordability and standards of living of these countries, since domestics don?t usually have to spend for housing, clothing, transport or food expenses on a daily basis like janitors do.
In his study, he wanted to find out, how long it would take for a minimum wage worker in these countries to work for one kilogram of rice? To find the answer, he proceeded to gather data.
In Hong Kong, he says, there is no minimum wage law but there is a minimum that applies to domestic helpers; in effect, this is the minimum wage. The latest figure is HK$3,480 per month, one-day off per week, on a 10-hour day. To get a feel for the amount, Bentulan used the latest exchange rate of HK$1=PhP5.37. For a domestic helper, this translates to P18,687 per month (HK$3,480) or P71.88/hour (HK$13.38 per hour). A janitor, on the other hand, using December 2007 data from Hong Kong?s Census and Statistics Department, earns an average of HK$5,241 per month (P27,777 per month), or HK$25.20 per hour (8-hour day) or (P133.54 per hour).
Singapore also has no minimum wage law but Hong Kong, Bentulan says, is a competitor that can lure domestics away from Singapore. Thus, he argues, Singapore can?t offer domestics lower wages without driving away potential DHs to HK. He says that Filipino domestic helpers in Singapore earn from S$300 to S$400 per month. A salary of S$350 per month or P10,853.50 translates to S$1.35 per hour or P41.74 per hour at an exchange rate of S$1=PhP31.01. On the other hand, according to 2005 data from the Ministry of Manpower of Singapore, janitors earn an average of S$792 a month, or P24,559.92 per month. Which works out to S$3.81 per hour or P118.08 per hour (for an 8-hour work day).
Philippine wages, in comparison, are niggardly. A domestic worker here at home, according to Bentulan, can expect a salary of P2,000 per month; a janitor, P8,450 per month. An HK janitor earns 150 percent more than an HK helper, who is usually a Filipina. A Singapore janitor earns 230 percent more than a Singapore helper, who is usually a Filipina. A Philippine janitor earns 430 percent more than a Philippine DH. Domestics, domestically, get the rawest deal.
Bentulan then looked at two supermarket chains: Wellcome and Cold Storage in Hong Kong and Singapore, respectively. He points out that the supermarket prices are higher than wet market prices (and here, at home, most Filipinos buy rice at the wet market). He adds the observation that ?there is no sign of rice shortage in Hong Kong and Singapore; in fact, these actual prices are slashed down from regular prices.?
The Filipina domestic helper in Singapore has to work for 77 minutes for a kilo of rice. Even the most expensive rice in Singapore can be bought with 123 minutes of work by a Singapore DH. A Filipino domestic has to work for 265 minutes for a kilo of rice.
The Singapore janitor has to work 27 minutes for a kilo of rice and his monthly salary can buy 460 kilos of rice. It takes from 45 to 60 minutes for a janitor in the Philippines to work for a kilo of rice.
What about the many work hours required to work for electricity, fare, food, water, cell phones and computers?
And yet we delude ourselves into thinking life is less expensive here at home. Bentulan notes that actually the Philippines is 300 percent more expensive than Hong Kong and 185 percent more expensive than Singapore?as far as rice is concerned.
In the end, we have to work harder in order to achieve less. If you work for 10 years in Singapore, it is like working for 20 years in the Philippines as a janitor. The Filipino will have to waste the prime of his youth (20 years) before he attains the wealth of an equivalent Singaporean. Working in the United States for one year, Bentulan says, is actually equivalent to working in the Philippines for 10 years. ?Who in his right mind will not grab this market opportunity if given the chance to work abroad? Will this ever end? The broken families, the pregnant daughters, the drug-addicted sons, the unfaithful wife or husband left behind?? he indignantly asks.
Bentulan?s proposal: Raise salaries 10 times! Immediately! Don?t worry about inflation, boost purchasing power, now!
Is he nuts? Read his book.
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You can download Thads Bentulan?s ?Hyperwage Theory? book here. And his PowerPoint presentation is available at here.