Pitting jobs against wages is absurd
In his column titled “Where are the billionaires and the superrich?” (Opinion, 4/22/13), Neal Cruz pitted the demand for higher wages against the need for more jobs. He said that if labor becomes too costly, investors will stay away from the country, and that workers should “accept lower wages first.”
We find the idea insulting to millions of Filipino workers who are jobless or barely surviving on poverty wages. The lack of jobs does not stem from a lack of foreign investors who are supposedly discouraged by high labor costs. Rather, the chronic joblessness stems from the lack of basic national industries and a backward agriculture sector. The situation leaves the economy dependent on foreign investors who are concentrated in the much-hyped service sector, which serves as dumping ground for surplus imports and demands for outsourced services. The sector, while expanding, is still insufficient to ease unemployment.
Jobs will not necessarily be created even if foreign investors do come into the country. Of late, investors have been increasingly pouring capital into financial markets rather than putting up new factories because they seek higher returns in the shortest time possible. For every P1 in foreign direct investments (FDIs) entering the country, P5 flows in as portfolios. This partly explains why the Philippine stock market is on steroids even as joblessness persists. Moreover, the sparse FDIs are concentrated on nonproductive sectors of the economy, such as mining, real estate, and business process outsourcing, which do not have the same broad labor base potential as manufacturing. Jobs in these sectors also pose serious health and safety risks to workers.
Studies have shown that labor cost is the least of the worries of companies in the country. It is just a meager section of production costs. High electricity costs and poor infrastructure remain the major deterrents to starting business. For small and local businesses, the influx of cheap imports that compete directly with locally produced goods remains the most serious hindrance to sustainability. And the Aquino administration’s incentives program, which is highly favorable to foreign investors and provides them income tax holidays, makes local companies lose out in the competition and consequently incur losses and lay off workers. High taxes and government corruption also make doing business difficult for small Filipino entrepreneurs.
It is clear that joblessness, while truly a problem, is being used by the Aquino administration and its apologists to blackmail workers into accepting meager wages, contractual employment, and trade-union repression. It is being used to counter workers’ legitimate clamor for a significant wage increase, such as the P125 across-the-board wage hike nationwide that we have been fighting for.
chair, Kilusang Mayo Uno,
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