Globalization, Not Wage Hike, Is Culprit for Job Losses
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Globalization has resulted in the destruction of domestic and export manufacturing enterprises, since they cannot compete with cheaper dumped products in the local markets nor in the global export market against manufacturing powerhouses such as China, and this is why the country is shedding jobs.
Independent think-tank IBON Foundation belied claims by the National Economic Development Authority (NEDA) that the proposed P125 across-the-board wage hike currently pending in Congress would result in the loss of 1.1 million jobs.
IBON research head Sonny Africa last week said that since 1995, the year when the Philippines became a member of the World Trade Organization (WTO) and began liberalization of the economy in earnest, local establishments have ceased operations or retrenched workers mainly due to financial reasons (i.e. lack of capital, high production costs) and reorganization or downsizing of firms.
Only a few firms have reported closing down or resorting to retrenchment as a result of increases in the minimum wage. (See Table) From 1995 to 2006, there were nine wage increases in the National Capital Region.
Table. Establishments Resorting to Permanent Closure/Retrenchment - Workers Affected (1995-2005)
Product Demand 178,341
Lack of Market / Slump in Demand 164,123
Uncompetitive Price of Products 10,395
Competition from Imports 3,823
Financial 214,854
High Cost of Production 53,715
Lack of Capital 54,964
Peso Depreciation 9,583
Financial Losses 103,372
Others (Economic crisis) 15,583
Organization 209,810
Reorganization /Downsizing /Redundancy 170,958
Change in Management / Merger 33,789
Lack of Raw Materials 24,976
Minimum Wage Rate Increase 3,044
Others 25,990
Total 660,266
Source: Department of Labor and Employment
Note: Details may not add up due to rounding
Globalization has resulted in the destruction of domestic and export manufacturing enterprises, since they cannot compete with cheaper dumped products in the local markets nor in the global export market against manufacturing powerhouses such as China, and this is why the country is shedding jobs, Africa said.
Africa also hit the Department of Labor and Employment (DoLE) for asking Malacañang to veto the wage hike bill.
“It is ironic that the DoLE, which should be defending workers’ rights, is instead pushing for a rejection of a proposed bill that will give the workers respite from the sky-rocketing cost of living,” he said. Ibon Features
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