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P125 Wage Hike and Arroyo’s Economic Boom

Published: January 28, 2007   |     |     |   Subscribe: RSS or Email    

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The wage debate

Poverty amid increased profits and productivity

Thus, only this small portion of the population felt whatever gains the economy has produced in recent years. In concrete terms, capitalist profits have been growing tremendously while workers’ pay has remained depressed. Between 2001 and 2005, for example, the net income of the biggest 1,000 corporations in the country expanded by 327.23 percent with an annual growth of 37.86 percent while their gross profit margin has steadily increased during the same period averaging 19.56 percent per year. Profits rose remarkably as labor productivity (or the average value created by each worker in a given period) went up by 34.64 percent in nominal terms and 10.23 percent in real terms between 2001 and 2005 based on figures from the National Wages and Productivity Commission (NWPC).

On the other hand, the minimum wage has barely moved since the Arroyo government took over. Data from the NWPC show that from 2001 to 2006, the minimum wage (including the cost of living allowance or COLA) in all regions of the country fell by 3.96 percent in real terms. In nominal terms, the minimum wage has increased by almost 23.66 percent during the same period but this was not enough to cope with the increase in cost of living. Using the family living wage of the NWPC as standard, the daily cost of living in all regions for each family has grown by 51.57 percent between 2001 and 2006.

This only means that while capitalists get richer from the sweat of labor, workers and their families become even poorer. In 2006, the average daily minimum wage (with COLA) for all regions was P229.35 which was short of P447.98 to meet the estimated daily cost of living (i.e. family living wage computed by NWPC) for all regions of P677.33. The gap between the minimum wage and the cost of living has widened by 72.27 percent between 2001 and 2006, increasing by 11.60 percent annually during this period.

Wrong economic policies

These statistics, culled from government agencies, strongly support the argument for a P125-wage hike. They show that going by the economic fundamentals, there is a reasonable basis for a substantial increase in workers’ pay.

More importantly, they also illustrate the moral urgency of a wage hike to give the direct producers of social wealth and their family some breathing space from seething poverty worsened by the relentless attack of price hikes, tax increases, diminishing public spending for social services, etc. that no longer allow the worker to stand up every morning to work and live.