The politics of wages and oil prices

The political turbulence and military hostilities in the Middle East are destabilizing the flow of oil from that region to our country and pushing the oil prices to unprecedented levels. The erratic and unpredictable oil supply and the successive hikes in the price of fuel are pushing the prices of goods and services to levels beyond the reach of the poor. The buying power of the masses, especially the minimum-wage earners, has been substantially eroded. Thus, there is now a strong pressure to raise wages, along with increases in the jeepney and bus fares. The “caravan’’ instigated by one federation of jeepney and bus drivers and operators a week ago, is just a trial balloon that is likely to escalate into a nation-wide “welga ng bayan.”

It is always popular to advocate for wage increases especially at a time like now when the cost of basic commodities are being made more and more unaffordable. Politicians, militant NGOs, and trade union leaders are currently positioning themselves in support of another round of wage hikes that are both substantial and immediate. They also support the clamor for increases in jeepney and bus fares, even as they vehemently oppose increases in the prices of food, electricity, water, as well as of tuition fees, medical services and medicines.

The employers, of course, as expected, are opposing these proposed increases in wages. They have always resisted, perhaps for some plausible reasons, any attempt to disturb the current levels of production and distribution costs. They would argue that any such attempt would be inflationary and would definitely erode our competitiveness in a largely globalized economy. In the ultimate analysis, if such hikes would, if at all accrue, it could only result to heavier burdens to the consuming public and bigger problems to the government. This line of argument is nothing new and the people are sick and tired of such rhetorics. 

The problem with businessmen is that their reasoning is always couched in jargons and technical terms that are incomprehensible to the ordinary man in the streets. They are either lacking in communication skills, or they do not care to reach out at all to the “hoi polloi’’ and to engage them in simple exchange of data and information. Such being the case, the businessmen are often portrayed by activists as greedy and profit-hungry capitalists who, without any social conscience, are out to squeeze the last drop of blood from the working class.

The government, of course, as always, would be torn between the proverbial “devil and deep blue sea.” While the government officials’ hearts may bleed for labor, their minds would be arguing at the side of management. Every public official, especially those in the executive departments, would love to put more pesos into the pockets of the workers. They would be pleased to put more rice on the tables of the workingmen, or more funds to make them afford the education of their children. But the government would be extremely worried at the resultant inflation, the impact of any wage hikes to the cost of doing business, and ultimately to the substantially eroded competitiveness of our country’s goods and services in the world globalized markets. That is not to mention the diminishing attractiveness of the Philippines to foreign investors. 

Raising wages, without a guaranteed corresponding increase in productivity, is like brandishing a double-edged sword. It is like handing over to the worker a double-bladed weapon, with which to fight his mortal enemies of poverty and powerlessness, while, at the same time, wounding his own hands as a consumer. What the workers need now are packages of viable and accessible safety nets, which, anyway had been promised to them, in the first place,when the proponents of globalization, and trade liberalization were still drumming up support for such draconian shifts in our economic and social life.

And so, given all these, where do we go from here? Should government leave the parties alone to interact and collide, in an unbridled “laissez faire,” with government folding its hands and refusing to interfere? Should we allow the issue of wages to divide and break the nation’s socio-economic equilibrium? Should government continue to deregulate oil while controlling the levels of wages? While truly, we cannot control the prices of crude in the world market, are we entirely helpless and incapable of creating some innovative coping mechanisms to help our people? Definitely, not. 

The urgent challenge of the government, as the great balancer, is to convene a high level social dialogue, where the top leaders of business and industry shall sit down with both the top honchos of the trade unions, the President and the Labor Secretary, to forge a new covenant that shall guarantee not just industrial peace, but social justice, humane conditions of work, and a sustained level of productivity of industries and world class quality of our products and services. One thing should be guaranteed though:the social and economic stability should not be anchored at the sole sacrifices of the working class. Labor, capital and government should bear jointly the burdens of keeping the nation strong and the people safe and free.