Wages: Supply and demand issue
Today is National Heroes Day. Customarily, we remember the great deeds of those who fought for our freedom or independence. In fact, some honored them like gods. Just like what the Rizalistas do. However, as we commemorate their great contributions, let us also be reminded of what, probably, the greatest deafblind this world has ever seen, Helen Adams Keller, has advocated. An American author, political activist and lecturer, she once said, “The world is moved along, not only by the mighty shoves of its heroes, but also by the aggregate of tiny pushes of each honest worker”. Needless to say, we too, the workers, are heroes ourselves. One caveat though, what she really meant and emphasized was “honest worker”.
However, as we (honest workers) move ahead with our respective journeys, we felt, among others, disrespected and unrecognized. Why? Because we equate such recognition or respect with the size of our pay. To a certain extent, that is accurate. To some, it wouldn’t hold true. Except for the more professionally managed and growth and people oriented companies, wages boil down to supply and demand. It simply means, when labor is scarce, the wages are high. When there is oversupply (of labor), wages are low.
One typical example is the business process outsourcing (BPO) industry. Specifically, those companies that need Certified Public Accountants or CPAs. Due to scarcity, BPOs have been in a tug-of-war as far as landing CPAs in their turfs these days is concerned. Thus, raising wages or salaries in the process. Also, due to the construction boom, not only are the professionals (like CPAs) are short these days, skilled constructions workers like carpenters, masons, etc. are scarce too. Consequently, their wages are beyond the stipulated minimum wage.
Sadly, however, what obtains in these industries are not true with the rest. In fact, it is the exact opposite. Thus, lacking in skills and knowledge, they are major contributors in the, still, constant unemployment rate. Worse, as the current birthrate is maintained, expect more supply of labor in the next two decades. If demands (meaning, no new companies are setup or there are no expansions from existing companies) for them wouldn’t improve, then, expect wages to remain low and unemployment rate to remain high in the same period.
Another good experience to take from is Singapore. The size of their economy and ours will not differ that much. However, population-wise, they are just a little over 5 million and we are more than 101 million. Thus, Singapore’s own labor supply is too small vis-a-vis their demand. So that, as we all know, it is not just that they gave their own Singaporeans huge salaries, they’ve also hired foreigners (like Filipinos) to help bridge the gap.
Therefore, what we need to do right now is create more jobs. How? Through expansion of existing companies or establishment of new ones. This mode, however, assumes that domestic investors have enough capital for expansion or for new undertakings. Realistically though, local investments could hardly put a dent on our unemployment woes. Their (locals) capitals have already been placed and possibly exhausted. Thus, there is an apparent need for foreign direct investments or FDIs. However, probably riding on the tag that our economy is one of the fastest growing in Asia, our government leaders are in the belief that what we’ve so far done are all appropriate and will bring us to our dreamed target. That there is absolutely nothing to change.
Truth be told, the size of our economy is one of this region’s tiniest. So that, it follows that our base figure, year after year, is too small. Therefore, increases in percentage points maybe high but the absolute amounts are just too little. Hence, when weighed against that of other ASEAN countries, ours will surely pale in comparison. Going deeper, it will clearly show that we are undercapitalized and are technologically inept. The root of the problem-the apparent lack of incentives for foreign investments. Despite these realities, however, our government has remained adamant in giving additional incentives to prospective foreign investors because, allegedly, of some nationalistic fervor. So, then, we may ask, is there a nationalistic view better than giving the poorest of the poor the chances to work and the opportunity to live and not merely exist?
On second thought, is this obvious dislike not perpetrated by the oligarchs? Undeniably, some oligarchs (who are in politics or have strong political influences) with unquenchable thirst for power and money could simply make up stories and put forward the so called “nationalistic fervor”. After all, who benefits from these foreign ownership restrictions? Frankly, the oligarchs or the affluent families not those in dire straits. Why? Because they have the money to put up as counterparts in 60:40 corporations.
In the meantime, our jobless brothers and soon to be jobless are still yearning for jobs and the employed have continued to dream for higher pays. We just hope and pray that the wait shall be over while they are still alive.
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