The new National Capital Region (NCR) minimum wage is still way below the amount that a family needs to cope with continuously rising prices, research group IBON said. The paltry increase reflects government’s refusal to institute a meaningful wage hike despite its urgency and doability. Government should instead have ordered employers to give a substantial wage increase, said the group.
The NCR wage board recently approved a Php25 increase from the current Php502 plus Php10 cost of living allowance. The National Wages and Productivity Commission (NWPC) said that the amount was approved based on the capacity of employers and the economy to absorb a wage hike, as well as its effect on inflation.
IBON however said that the Php537 minimum wage is Php464 or 46.3% short of the Php1,001 family living wage (FLW) or the amount that a family of five needs for decent living as of October 2018. The minimum wage varies and is usually lower outside NCR.
The group underscored that a substantial minimum wage genuinely helping millions of low-income Filipino families to cope with high inflation is possible.
NCR firms have more than enough profits to support a meaningful wage hike, IBON said. Figures from the Philippine Statistics Authority’s (PSA) Annual Survey of Philippine Business and Industry (ASPBI), for instance, show that NCR firms with 20 or more employees had combined profits of Php903 billion in 2015 and gave an average daily basic pay (ADBP) of Php530. Using the ADBP as a proxy wage indicator, ensuring that workers will get a substantial minimum wage of, say, Php750 will cost just Php132 billion or 14.6% of employers’ profits.
The wage hike need not accelerate inflation if employers accept this small cut in their profits instead of passing the increase on to consumers as higher prices, IBON stressed. Large companies are more capable of giving this meaningful wage increase. Meanwhile, the group said, government should make sure that micro, small, and medium enterprises (MSMEs) can afford this with sufficient assistance such as tax breaks and incentives, cheap credit, subsidized utilities, and technology and marketing support.
Growing workers’ productivity also justifies a meaningful wage hike, said IBON. NCR labor productivity grew from Php456,059 per worker to Php614,297, or by 35%, from 2009 to 2017. In the same period however, the real value of the mandated minimum wage only increased by 11%, while the ADBP increased by only 16%. This shows that workers’ productivity is not going to increasing wages, the group noted.
A substantial wage hike is an immediate measure that government can take to help Filipino workers’ families facing growing difficulty meeting their most basic needs, IBON said. The government is duty-bound to look after the rights and welfare of workers, such as by ensuring meaningful wages and equitably distributing wealth. The government has the responsibility to ensure that workers are able to attain a decent standard of living and that they get a just share of the fruits of their labor, said IBON. ###