Wage hike is loose change

MANILA, Philippines - The wage hike of P22 for Metro Manila workers is loose change and woefully inadequate to bridge the gap between the minimum wage and the cost of living. The regional wage boards must be abolished for betraying the working class once more. P22 is not even enough for workers to buy a kilo of commercial rice or even the cheapest NFA rice worth P25. Since the last wage hike was in June 2008, the wage hike is effectively P11 per year over two years. Na-onse na naman ang mga manggagawa.

The wage hike exposes the real economic legacy of the Gloria Arroyo government—deepening poverty exacerbated by a cheap labor policy and lack of social protection. The 7.3% economic growth is a myth for the workers since they cannot partake of so-called progress.

If the recommendation of the Department of Finance to increase VAT from 12 to 15 percent is approved, then half of the wage hike will be wiped out. That is P12 or 3% of the new minimum wage of P404 will not go to the pockets of the workers and just possibly end up in the wallets of politicians.

The wage boards have repeatedly betrayed the workers since they were established in 1989. The yawning disparity between the minimum wage and the cost of living is the clearest expression of a system failure. Our own study reveals that the cost of living for a six-member family in Metro Manila already reached P1,000 per day last April. Even if two members of the family earn a living—the buy one, take one policy of the state—their combined income will not even be enough for a decent life.

In lieu of the regional wage boards, a National Wage Commission must be formed with the mandate to fix wages based on the single criterion of cost of living. Despite the huge gap between the present minimum wage and the current cost of living, the National Wage Commission can achieve equalizing the two by a host of mechanisms, among which are direct wage increases, tax exemptions, price discounts at social security subsidies for workers.

The Department of Labor and Employment has estimated that two million minimum wage earners in Metro Manila will be directly affected by the wage hike. But they did not say that hundreds of thousands will not enjoy the wage hike because of exemptions and deferments clauses embedded in the wage order.