The present minimum wage at the National Capital Region (NCR) or Metro Manila is set at a P466.00 per day. That is P116.00 more or 33 percent higher compared to what it was in 2006 which was set at P350.00. Since then, the Consumer Price Index in Manila has gone up from 100 in 2006 (the base year) to 129.1 in March this year. This means that the cost of living in Manila has gone up by 29.1 percent in that period. Against inflation, the minimum wage earners at the NCR won the race by around 4 percentage points.
In Central Visayas, the current minimum wage is set at P340.00, the highest applicable to Cebu. In 2006, it was P241.00. This means an increase of P99.00 or 41 percent. The CPI as of March this year for the region was placed at 139.8. This implies an increase of 39.8 percent in the cost of living since 2006. Like the NCR, the minimum wage earners in Central Visayas also won the race the race against inflation by at least one percent.
But is winning the race against inflation enough? My answer is no. More than the race against inflation, labor must also fight for a fair share of the increase in output that the nation produces every year. To be fair, labor’s share in output or their wages should also increase by the same increase in real per capita GDP or gross domestic product.
In 2006 the country’s real per capita GDP was placed at P54,226 at constant 2000 prices or P72,104 at nominal prices. Last year, per capita GDP at constant 2000 prices was placed at P69,477 or an increase of 28.1 percent in real terms while nominal per capita GDP was placed at P118.600 or an increase of 64.5 percent in nominal terms.
To be fair then, I believe that the minimum wage which is paid in nominal terms should have been increased also by the rate at which the nominal per capita income had been increased from 2006 to 2013 or by the increase in real capita GDP plus inflation in the same period. Viewed in this way, I think labor was greatly shortchanged.
Help is needed. Mayday, mayday, mayday! But is help coming?
In Manila, Malacañang announced nothing by way of any promise to increase the minimum wage. All it says is that the President had a talk with labor and that a dialogue involving government and labor is continuing. But so far there is no order from the President to the Regional Tripartite Wages and Productivity Boards (RTWPB) to increase the minimum wage in their respective jurisdictions. It is very much unlike in the US where President Obama who just visited the country this week is very vocal in moving for the increase in the US minimum wage.
In the Philippines, the framework in the pursuit of government policies and programs on labor is provided for in the 1987 Constitution, which recognizes the significant role of labor in national development. In Article II, Section 9 of the constitutions, it is declared that as a policy “the State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.”
We have seen, though, that the high poverty incidence in the country remains high at over a fourth of our population for decades now. This only means that this policy has failed which is largely due to the failure of the government to increase the minimum wage to a level commensurate with the rising cost of living and the need to have a wage level that would be enough to provide workers with a decent and respectable life.
In addition, Article II, Section 18 provides that “the State affirms labor as a primary social and economic force. It shall protect the rights of workers and promote their welfare.” Recognizing that the labor sector is a critical component of society, Article XIII, Section 3, likewise mandates that “the State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and quality of employment opportunities.”
In fact, labor is largely left to their own imagination on how to live with their small wage and in finding ways to be on the job for long. For example, why does the government allow the use by business of contract labor which makes one a temporary worker for a job which is actually a permanent fixture of business?
The Labor Code of the Philippines, specifically Article 211, reads that the policy of the State is to promote full collective bargaining, including voluntary arbitration as a mode of settling labor or industrial disputes; promote free trade unionism as an agent of democracy, social justice and development; nationalize and restructure the labor movement in order to eradicate inter-union conflicts; promote the enlightenment of workers concerning their rights and obligations as union members and as employers; provide adequate administrative machinery for the expeditious settlement of labor or industrial disputes; and to ensure a stable but dynamic and just industrial peace.
Yes, collective bargaining agreement, but again, how many of our wage earners benefit from this? The fact that labor had to raise their demand for higher minimum wage to the RTWPB only means that the collective bargaining agreement system is also a failure.
The last point I would like to raise is this: The cost of living at the NCR, as reflected in the government computed poverty threshold, was estimated at P20,344 in 2012. This is 4 percent higher than the P19,522 estimated for the areas outside. Yet the NCR’s minimum wage exceeds by 37 percent that of Central Visayas or Cebu. Why? Why? Why?
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