Labor group calls on Duterte to abolish all wage boards

Business World file photo

The Trade Union Congress of the Philippines (TUCP) is urging President Duterte to abolish all wage boards in the country and replace it with a singular wage-fixing body that will determine a uniform minimum wage rate nationwide.

TUCP President Raymond Mendoza also said there is now an “urgent need” for the President to begin the process of abolishing the differentiated provincial rates by overhauling the 30-year-old current wage setting structure because “the current minimum wage setting mechanism only favors those businesses and no longer balances the interest of workers.”

“The wage board is key in achieving equality and social justice for workers. Its mandate is to ensure that our economic growth also benefits the workers. However, our economy is growing and business enterprises have been prospering but the workers who helped built that wealth remains impoverished,” Mendoza said in a statement on Sunday.

The 17 wage boards across the country were created in 1989 through Republic Act 6727 also known as Wage Rationalization Act. Its mandate is to set minimum wage that protects workers’ welfare and promote enterprise and workers productivity.

Despite the wage increase orders issued last year, workers’ minimum wages across all sectors nationwide still failed to reach even half of the P1,400 daily standard amount set by the National Economic and Development Authority for a family of five to live a comfortable life, the group said.

According to TUCP, the average minimum wage was raised to P374 a day by the end of 2018, from P340 during the first quarter of the same year.

The TUCP even noted that Labor Secretary Silvestre H. Bello III admitted last week that the Metro Manila wage board should have granted a P100 daily wage hike to enable workers cope with rising inflation rather than a mere P25 daily wage increase on its wage order issued on November last year.

“We have reached a point where even the secretary of labor openly admitted the discrepancy. This is an affirmation of the TUCP observation that wage boards have become obsolete and irrelevant to equate in the balance of labor and capital the interest of workers in these generation where there are no more boundaries,” Mendoza said.

Also, before the abolition of wage boards, the group noted that there should be a review of the wage increase orders issued last year.

“Before overhauling the wage fixing mechanism, President Duterte must order all 17 regional wage boards across the country to immediately review and adjust their issued wage orders to a uniform daily P100 wage hike as stated by Secretary Bello as the amount the board should have granted to lift workers out of poverty,” Mendoza said. - Bernadette D. Nicolas

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

Fix wages nationwide, labor groups tell Duterte

As the P25 minimum wage increase for Metro Manila workers took effect on Thursday, labor group Federation of Free Workers (FFW) and affiliates belonging to a coalition called Nagkaisa urged President Duterte to form a presidential commission that would study the creation of a national wage fixing mechanism.

In a statement, FFW said the P25 wage increase, approved by the Regional Tripartite Wage and Productivity Board, was “latest proof of how wages fixed under the mechanism deepens inequality rather than eradicate chronic poverty.”

Failure

It said the group and other Nagkaisa affiliates believed “the meager increase simply fits into the 1989 template” created by Republic Act No. 6727, which bases wage increases on employers’ capacity to pay rather than on workers’ standard of living.

FFW said during the presidential election campaign, Duterte recognized that setting wages by regions was a failure.

“He himself announced the need to overhaul the system,” said Sonny Matula, FFW president.

“But until today, no executive action has been done so far to walk his pledge,” Matula added.

Another labor group, Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP), said workers were unable to feel the impact of the P25 wage increase because of inflation.

Purchasing power

Alan Tanjusay, ALU-TUCP spokesperson, said the purchasing power of P25 nowadays was just P17.50.

“It has no impact,” Tanjusay said.

The government, he added, should step in and fill the gap by giving workers a monthly food voucher worth at least P500.

Tanjusay said Duterte had “neither said yes nor no to our proposal.”

“So we remain hopeful,” he added. - By: Tina G. Santos - Reporter / @santostinaINQ

New Metro Manila minimum wage set at P500 to P537

Wage Order No. 22 will take effect 15 days after publication in a newspaper, but labor groups say the increase won't help workers struggling with rising inflation

SEEKING WORK. Hundreds troop to the Quezon City Hall for a job fair on May 1, 2018. File photo by Darren Langit/Rappler 

MANILA, Philippines (UPDATED) – The Department of Labor and Employment (DOLE) on Monday, November 5, confirmed the P25 across-the-board wage hike for minimum wage earners in Metro Manila.

New minimum wage rates for agricultural workers, firms in the manufacturing sector with at most 10 workers, and firms in the retail as well as service sectors with at most 15 workers will earn at least P500 daily, from the previous P475.

Non-agricultural workers, meanwhile, will soon have a daily minimum wage of P537 from P512.

Under Wage Order No. 22, the P10 cost of living allowance (COLA) will also become part of the basic pay. Previously, the minimum basic pay ranged from P465 to P502, with an additional P10 COLA.

National Wages and Productivity Commission Executive Director Criselda Sy explained that the integration of COLA in the basic pay means bigger computations for overtime pay and 13th month pay.

The new wage order will be effective 15 days from publication in a newspaper. Sy said a copy of the order will be sent to their office on Monday afternoon.

The order was signed by DOLE, the Department of Trade and Industry, National Economic and Development Authority, and an employers' group representative. Labor group representatives signed the order, but with reservations.

The wage order can still be appealed within 10 days upon publication. But Sy said there were no appeals that had been successfully granted in the past.

Higher inflation?

Asked whether the regional board could have approved a higher increase, Sy explained that doing so might lead to "secondary inflationary effects."

"It could be a potential source of secondary inflationary effects. Inflation is at 6.7% and it could be higher if we implement a higher wage hike," she said.

The Bangko Sentral ng Pilipinas said on Monday that the P25 wage hike had already been taken into consideration in its latest inflation forecasts – 5.2% for 2018, 4.3% for 2019, and 3.2% for 2020.

Sy also warned that the minimum wage policy "may be overburdened" with a higher rate, and may also lead to layoffs, if employers are unable to accommodate the additional cost.

Labor Secretary Silvestre Bello III noted that the decision to implement the P25 wage hike was reached to "balance" the interests of both workers and employers. The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) had called for a P100 hike, down from the initial P334, during discussions.

"In deciding [the] minimum wage adjustment, the board needs to balance the needs of workers and their families, with the capacity of enterprises to pay the additional labor cost, without impairing businesses, especially [their] capacity to continuously generate jobs," Bello said.

Based on Republic Act No. 6727 or the Wage Rationalization Act, each region in the Philippines has a unique minimum wage set by the Regional Tripartite Wages and Productivity Boards. The factors taken into consideration include the poverty threshold, employment rate, and cost of living specific to the region.

'Overworked, underpaid workers'

Labor groups slammed the "measly" P25 increase, saying it is "not a relief" for workers.

ALU-TUCP said inflation would continue to "prolong" the plight of workers, and warned of further strikes.

"By not giving a substantial wage increase, we are looking at disgruntled, dissatisfied workers, with or without unions, demanding higher wages, directly confronting employers and business owners, creating tension within the enterprise level thereby disturbing and breaking the fragile industrial peace," ALU-TUCP spokesperson Alan Tanjusay said.

Meanwhile, Partido Manggagawa said the hike is "30% short" of making up for the P35.84 "erosion" in wages, according to its own estimate.

"P25 is just alms, not relief to overworked yet underpaid Filipino workers. P25 cannot compensate for the [almost] 7% runaway inflation in Metro Manila and real wage stagnation, despite 50% productivity growth from 2001 to 2016," Partido Manggagawa president Rene Magtubo said. – Aika Rey Rappler.com