Time to review minimum wage
Labor Secretary Silvestre Bello III last week announced that he has ordered all regional wage boards to study the possibility of an increase in the daily minimum wage, after noting that “the buying capacity of workers has been affected” by skyrocketing prices. Bello directed the Regional Tripartite Wages and Productivity Boards to submit their recommendation by the end of April. Sen. Panfilo Lacson has backed the call for this “very timely” review of wages to help workers cope with the surging costs of fuel and basic goods amid Russia’s ongoing invasion of Ukraine.
Workers agree that something has to be done about the minimum wage, which was last adjusted more than three years ago. However, they are not that hopeful about Bello’s latest pronouncements. “The regional wage boards are useless. They have been sleeping on the job in the past three years,” lamented Rene Magtubo, chair of labor group Partido Manggagawa (PM). Workers instead want Congress to pass a law mandating a P100 across-the-board wage increase, Magtubo said. The group’s additional demands include cash aid, discounts, and programs for the creation of emergency jobs.
Three years are indeed too long for wages to remain stagnant. As Magtubo pointed out, data from the National Wages and Productivity Commission showed that, when adjusted for inflation since 2018, the P537 minimum wage in Metro Manila was worth only P494 as of February 2022. Minimum wage earners in Metro Manila last received a wage increase on Oct. 30, 2018, while those in the Cavite, Laguna, Batangas, Rizal, Quezon (Calabarzon) region got theirs on Feb. 28, 2018. The most recent minimum wage hike was granted in Cagayan Valley on Feb. 4, 2020. Wages outside the metropolis, which range from a low of P290 in the Bangsamoro region to P420 in Central Luzon, are much lower since policymakers consider the cost of living in those areas as being cheaper.
At current prices, those wage levels are truly insufficient and unjust. Starvation wages, as workers have been pointing out. A daily wage earner in Metro Manila working 22 days a month (assuming two days off each week) gets only P11,814, well below the P12,082 poverty threshold for a family of five as of June 2021. The poverty threshold is defined by the Philippine Statistics Authority (PSA) as the minimum income necessary to meet basic food and nonfood needs such as clothing, housing, transportation, health, and education expenses. No wonder more Filipinos were driven into poverty in the first half of 2021.
Based on the results of the First Semester 2021 Official Poverty Statistics conducted every three years by the PSA, poverty incidence—or the proportion of Filipinos whose incomes fell below the per capita poverty threshold—stood at 23.7 percent, from 21.1 percent recorded in the first half of 2018. That latest figure translates to an additional 3.87 million individuals joining the ranks of the poor in the first half of 2021. The total number of poor Filipinos as of June last year: 26.14 million, or about a quarter of the country’s population.
In the wage-setting process, however, the government must also consider the position of employers, many of whom were adversely affected by the economic recession caused by the COVID-19 pandemic. In fact, many business establishments, from small enterprises to huge conglomerates, had to lay off tens of thousands of workers to cut on cost and keep their operations running. Legislating wage increases also has its drawbacks. For one, the entire legislative process takes time and any adjustment may come too late. Congress could show its support for workers better by enacting laws that will protect their interests, such as ensuring their security of tenure and pushing for an end to contractualization, an unredeemed campaign promise by President Duterte.
The regional wage boards are the ideal avenue for discussing wages, but only if they function as originally intended. That is, to keep the balance between the interests of employers and workers. In the current economic situation, the boards could cast a kinder eye on the plight of workers whose families are struggling to even provide decent food on their table.
Since the process of setting the new level of wages may be slower than needed, business owners, especially those that have been reporting huge earnings in 2021 — some even surpassing pre-pandemic levels — can in the meantime provide their workers assistance in the form of transportation allowances or allow them to continue working from home to save on commuting expenses amid escalating fuel prices. They did this in 2020 when the pandemic struck and despite their operations being hit hard by the economic recession. There’s no reason they can’t do it again, especially at this time when it could mean survival for their workers.
