Labor Day lamentation

Workers celebrate, or rather mourn, Labor Day burdened with the same old problems that have beset them for years: Lack of jobs, low pay, high cost of living, and labor migration despite the perils just to seek better opportunities, just to name a few. And with inflation surging to its highest in 14 years due to rising food and fuel prices, minimum wage earners are especially hard-pressed to make ends meet. No wonder each year on May 1, labor unions are protesting, instead of toasting, the occasion.

The perennial sticky point has been the minimum wage which has hardly been adjusted to catch up with rising prices. The average increase in the cost of basic goods and services was estimated by the Philippine Statistics Authority (PSA) at 7.6 percent in March. Although this inflation rate was lower than the 8.6 percent the previous month, which was the highest since November 2008, it was more than double the 3 percent registered in January 2022. Thus, wage earners can buy fewer essential food and non-food items with their take-home pay.

The nonprofit think tank Ibon Foundation has often highlighted the huge gap between the minimum wage and the needed income for a family of five to live decently. It noted that the government’s latest poverty threshold, which is the minimum income that a household needs to meet basic food and non-food requirements, is only P12,030 a month. While P12,030 is 11.8 percent higher than the P10,756 poverty threshold in 2018, this indicates that for a family of five, each one has only P80.20 a day — or P55.86 for basic food needs and P24.34 for essential non-food items. Do the simple math and it will show how inadequate this is.

The World Bank, meanwhile, defines extreme poverty as living on less than $1.90 for every person a day, or a little over P100 based on current exchange rates. Using this as a base, the number of Filipinos considered poor would be more than the 3.5 million families or 19.99 million individuals reported by the PSA as living in poverty in 2021. The sad part is that elevated inflation and the high interest rates adopted by monetary authorities to address surging prices will push more Filipinos below the poverty line in the months ahead.

The solution that has often been pushed, but most of the time ignored, is to raise wages. Ibon Foundation has made a clear case of the insufficiency of the minimum wage. It cited the minimum wage in Metro Manila, the highest in all regions, which is not even half of the family living wage in the region. It said the P570 minimum wage in the National Capital Region is only 49.1 percent of the P1,161 family living wage requirement as of January 2023. In the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), which has the lowest minimum wage, the P341 basic daily pay is only 17.5 percent of the region’s family living wage of P1,944.

At least eight minimum wage hike petitions are so far pending in four of the country’s 17 regions, as more labor groups press for higher wage adjustments amid rising living costs. These were filed at the regional tripartite wages and productivity boards of Metro Manila, Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon), and Western and Central Visayas, according to the Department of Labor and Employment. The United Domestic Workers of the Philippines also asked for a P1,000 increase in the monthly wage of household helpers. The problem with this arrangement is that it takes a long time for the wage boards to act on such petitions.

What is worth looking into is the proposed across the board legislated increase in wages of private sector workers, which Senate President Juan Miguel Zubiri stressed is needed because “a decent life costs a decent wage.” Zubiri filed Senate Bill No. 2002 last March, explaining that “if workers are putting in hours and hours of labor, day after day, and yet are still unable to afford their rent, bills, and basic necessities, then there is a problem.”

Representatives Arlene Brosas of Gabriela, France Castro of ACT Teachers, and Raoul Manuel of Kabataan party lists have also filed House Bill No. 7568 seeking a P750 minimum wage regardless of employment status, industry classification, and location of the enterprise. There is really nothing controversial about legislated wages.

This would be similar to that in the United States, for instance, which has a federal law that sets a fair minimum wage, or the lowest wage per hour that a worker must be paid, across the country. While states and local municipalities can set their minimum wage rates, such rates must be above the federal rate.

A wage increase will be a big relief to millions of wage workers. This need not be inflationary if profitable employers show some generosity to share a part of their billions of pesos in profits with their workers, and not pass on such expenses to consumers by raising the prices of their products or services. A legislated decent wage hike is reason enough to make workers celebrate, and not lament, Labor Day.