Arroyo’s Wage-Hike Proposal Is ‘Anti-Poor’

Jan. 28, 2007

Any wage hike results in increased purchasing power for workers. However, it can be anti-poor if it does not take into account the interests of those who are getting less and benefits those who are getting more. On the other hand, any mandated increase in the salary of overseas Filipino workers (OFWs) is done in the name of the almighty dollar.

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While the Macapagal-Arroyo administration opposed the P125 ($2.55) across-the-board increase in the minimum daily wage of the 12.46-million private sector workers, it is, however, pushing for the salary increase of 1.5-million government employees. At the same time, it wants home caregivers abroad to have an increase in salary from $200 to $400 monthly. How does one make sense of this contradiction?

Budget Secretary Rolando Andaya, Jr. last week said President Gloria Macapagal-Arroyo is ready to certify as urgent a bill that would increase the salaries of about 1.5 million government workers this year. He also said that P10.3 billion ($210.4 million) is needed for the wage hike bill in 2007.

The entire wage hike plan that extends up to 2010, however, will require between P90 billion to P100 billion ($1.8 billion to $2.0 billion). Clearly, the planned salary increase for government employees will be done not only this year but in the following years until 2010.

This may sound like welcome news at least for government employees, but the Macapagal-Arroyo administration is targeting a 10-percent, across-the-board salary increase for them this year. The increase, therefore, will not be in absolute figures (for example, the P3,000 or $61.29 monthly increase being demanded by organized government employees) but according to ones basic rate.

Under the Salary Standardization Laws (SSL) salary scale which was last revised in July 2001, the lowest-paid government employee covered by SSL has a basic monthly salary of P5,082 or $103.82 (Salary Grade or SG 1, Step 1). Government employees whose positions fall under SG 1-1 like utility workers will only get an additional P508.20 ($10.38) monthly if their pay were increased by 10 percent.

On the other hand, the highest-paid government employee covered by SSL is the Philippine President who gets a monthly salary of P57,750 or $1,179.77 (SG 33). A 10-percent increase will therefore translate to an additional P5,775 ($117.98) in the monthly salary of Mrs. Macapagal-Arroyo.

The planned 10-percent salary increase therefore discriminates against those who are currently getting less and is inherently biased for those belonging to the higher salary grades. The militant workers demand to increase salaries in absolute terms P125 ($2.55) in the daily wage of private sector workers, P3,000 ($61.29) in the monthly salary of government employees seeks to remove this discrimination and bias by giving equal amounts to all workers.

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