Poor minimum wage earners

Workers getting the mandated minimum wage have reason to feel bad. A recent study comparing how minimum wages in 52 countries cover just the basic nutritional requirements placed the Philippines in the 51st spot, only better off than Nigeria.

The January 2019 study conducted by picodi.com, a Portugal-based technology company catering to consumers shopping online, sought to answer the question: How much money is left after meeting the basic nutritional needs?

Its analysis team looked at prices of eight universal food groups in 52 countries and matched them with the current minimum wages in those states. It turned out that in some countries, the minimum wage was barely enough to purchase a modest nutritious food basket.

For the purpose of its report, picodi.com created a shopping basket filled with items from the eight universal food groups: bread, milk, rice, eggs, cheese, meat, fruits and vegetables. It said these products met the nutritional needs of an adult, and the prices were constantly monitored globally.

In the Philippines, for a basket filled with basic items from the list, one would have to pay about P4,370. The contents of the shopping basket and the average prices were: 10 liters of milk, P774; 10 loaves of bread at 500 grams each, P516; 2.5 kilos of rice (the cheap NFA variety), P71; 20 pieces of
eggs, P130; a kilo of cheese, P363; 6 kilos of poultry and beef, P1,357; 6 kilos of fruits, P585, and 8 kilos of vegetables, P574.

Since Jan. 25, 2018, the lowest minimum wage (picodi.com used the official figure for nonagricultural workers in Ilocos) in the Philippines was equivalent to P5,376 a month. Considering the average prices of food in the Philippines, expenditure on basic food products accounted for 81.3 percent of the minimum wage, placing the Philippines 51st on the list of 52 countries.

The Philippines’ ranking would rise to the middle of the group if it were to be based on the minimum wage of those in Metro Manila, but the survey used the lowest minimum wage in the countries covered.

According to the rankings, Australia, Ireland and the United Kingdom were countries where the minimum wages were the most favorable. Taking into account local prices, employees with the lowest possible remuneration there would spend only 7 percent of their salary for the same food basket.

Other countries where minimum wage earners needed to spend less than 10 percent of their monthly salary on such a food basket included the Netherlands, Spain, Luxembourg and Germany. An American minimum wage earner needed to allocate 14 percent of his/her monthly income for the food basket.

Our neighbors were mostly better off. Minimum wage earners in Indonesia and Malaysia needed 34.7 percent and 37.2 percent, respectively, of their monthly income to pay for their basic food necessities. (Metro Manila’s minimum wage earners will be in this same category.) Those in Vietnam had to shell out 53.7 percent and, in Thailand, 56.4 percent.

In sum, countries at the top of the list — majority of the developed nations — had a combination of higher minimum wages and lower consumer prices.

For some, prices of essential food may be higher, but wages were more than enough to cover the cost. For the Philippines, it seems we have a case of low minimum wages and high consumer prices.

The study covered the cost just for food. There are other basic needs such as shelter, water and electricity. Also, this was only for an individual working for the minimum wage. Married couples both earning the minimum wage would truly find it hard making both ends meet, especially if they have children.

No wonder minimum wage earners are the most affected by high inflation. Remember the mounting complaints last year about rising prices of food and other basic necessities?

Worse, these workers are usually the ones who live far from where they work (because of prohibitive housing expenses in urban centers) and have to spend on transport fares, as well as hours on the road, to get to their workplace and back home.

The government should find ways to help ease their burden. The same goes for private employers, particularly those that have been generating so much profit for so long.