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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

They belie the doomsday scenario repeatedly raised by the business sector, and loyally echoed by President Arroyo and her economic managers that a substantial wage increase would result in massive bankruptcy, widespread displacement, high inflation, and overall economic slowdown. This doomsday scenario is actually already a reality that Filipino workers are forced to face everyday and Mrs. Arroyo has only her own economic policies to blame.

Thousands of small local firms become bankrupt due to lack of government support and undue exposure to foreign competition. From January 2001 to June 2006, for instance, 3,540 firms closed shop or reduced their workforce because of competition, displacing 105,010 workers in the process; due to financial reasons: 3,902 affected firms with 91,345 displaced workers; and due to reorganization: 7,826 affected firms with 113,109 displaced workers. In contrast, only 104 firms closed shop or reduced their workforce that displaced 1,793 workers due to minimum wage adjustments in the last six years.

Inflation rate, meanwhile, has been on the rise averaging 5.55 percent annually from 2001 to 2006 as utilities, for instance, are monopolized, privatized, and deregulated. During this period, Meralco rates for residential users have jumped by 51.82 percent; water rates in Metro Manila have increased by 259.37 percent (Maynilad) to 333.54 percent (Manila Water); and diesel pump prices have soared by 150.36 percent.

Social payback

President Arroyo must undo her economic mismanagement if she seriously wants to reverse the trend of bankruptcy, displacement, and spiraling prices and not further burden the poor workers by sabotaging HB No. 345 (and its Senate counterpart – Senate Bill 2030 that proposes a one-time P100-wage hike).

If Mrs. Arroyo wants to talk about “social payback from the booming economy”, the only acceptable and meaningful social payback that Filipino workers deserve today is a substantial increase in what they take home to spend for the daily needs of their families. And even this is not enough as current wage hike proposals would still not enable many families to meet the decent living standard. Thus, it must be complemented with price control reforms, tax reforms (i.e. repeal the regressive VAT on socially sensitive products and services), and drastic increases in spending for education, health, housing, and other social services.

Of course, the ordinary Filipino worker knows too well that the President and the capitalist class she protects and represents will not give the substantial wage hike demand on a silver platter. It took more than seven years since the P125 campaign was launched before Congress can even pass a bill on it. HB No. 345 is nonetheless an initial victory, even as it paves the way for more struggles– to consolidate and strengthen the rank of workers and further expose and weaken the rotten regime– that can only be won through uncompromising militancy. IBON Features