Minimum wage leaves labor groups unsatisfied

Manila Times file photo

Three decades have passed since Republic Act (RA) 6727 or the “Wage Rationalization Act” was enacted in 1989, which turned out to lack teeth.

The measure paved the way for the creation of the National Wages and Productivity Commission (NWPC) and the Regional Tripartite Wages and Productivity Board (RTWPB) in every region of the country.

However, there has never been an instance when petitions for wage increase from labor workers in the private sector were granted or even close to the demand of the toiling class.

The last time workers got significant wage increase was also in 1989, when then president Corazon Aquino granted a P25 daily across-the-board wage increase nationwide.

Section 2 of RA 6727 states: “It is hereby declared the policy of the State to rationalize the fixing of minimum wages and to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment generation in the countryside through industry dispersal; and to allow business and industry reasonable returns on investment, expansion and growth.”

The wage adjustments by the National Capital Region (NCR)-RTWPB, however, were anything but rational, as in 2016, it granted only P10 out of the original petition of P154; in 2017, it gave P21 out of P184; and in 2018, it approved P25 out of labor’s petition of P334.

Since January 2018, the NWPC has issued wage orders adjusting the minimum wage rates in 16 regional wage boards across the country, except for Caraga Region (Region 13) which remained at P311 minimum wage a day.

The Metro Manila wage board was the most recent regional wage board that adjusted the wage rate from P512 to P537, raising the average daily nominal minimum wage rates in 17 regions nationwide from P200 a day in September 2018 to P232 a day as of Nov. 11, 2018.

The Associated Labor Unions-Trade Congress of the Philippines (ALU-TUCP), the country’s biggest labor group, said that workers were dissatisfied with the wage increase given the high inflation rate.

Citing as an example the wage increase in Metro Manila, ALU-TUCP spokesman Alan Tanjusay said the buying equivalent of P25 is only P17.50 per day these days because of rising prices of commodities and costs of services.

“On the average, wage boards acted only on the capacity of employers and businesses to afford the wage increases by adjusting the nominal minimum wage rates by P32 to P36 a day nationwide. This is too small for workers who help business and economy grow,” he said.

Tanjusay added the nationwide average daily minimum wage of P232 was inadequate for millions of poorly paid entry-level, rank-and-file and contractualized minimum-wage workers nationwide in agriculture, services and manufacturing sectors. ALU-TUCP said these types of workers with labor-intensive jobs need at least P800 to P850 a day in order to live above the poverty threshold.

Louie Corral, ALU-TUCP vice president, warned government and employers that hunger and poverty would only escalate, causing more instability from the labor front.
“Unfortunately, with this wage order instead of a realistic intervention to workers’ plight, the P25 will only prolong the instability, Corral said.

The group said it would file another wage hike petition this month.

Many factors

For her part, NWPC Executive Director Ma. Criselda Sy said that their wage hike decision was backed up by simulation on the impact of the proposed increase on existing economic indicators like inflation, with results showing that a higher wage hike would further increase the inflation rate, which would cause a second round of inflationary effect.

She cited as example the wage hike in 1993 wherein the computed erosion in the purchasing power of workers was at P44.27, but the approved wage increase was only P17 because the wage board took into consideration the other factors in the socio-economic environment that the economy was not growing at that time.

“The difficult task for the board is to come up with amount that essentially would balance the competing interests of our stakeholders and the primary consideration there is if the economy can absorb the increases that will be ordered by the regional board,” she said. - By WILLIAM DEPASUPIL, TMT