Economic managers moonlighting as employers’ spokespersons—labor group

 

The labor group Partido Manggagawa (PM) slammed National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan and Finance Secretary Benjamin Diokno for “moonlighting as employers’ spokespersons” with their doomsday predictions about a P150 legislated wage hike is approved by Congress.

 

“Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr. also warned of job losses, price hikes and economic slowdown if wages are raised. Government’s economic managers and employers’ representatives are both painting the same apocalyptic scenarios without any substantiation,” stated Rene Magtubo, PM spokesperson and Marikina City councilor.

 

He added that “Our own economic modelling shows that salary increases will have an insignificant impact on both employment and inflation contrary to Balisacan and Diokno’s claims. Empirical studies for other countries also show similar results.”

 

PM cited that Indonesia, which is similarly situated as the Philippines as a middle-income country with a large informal economy, raised wages by some 50% in 2011 and 2012 without negative effects on prices, employment and GDP. In comparison, a P150 wage hike redounds to just a 25% boost in the minimum wage in Metro Manila.

 

“Raising wages improves living standards and has a secondary effect of increasing worker motivation and morale and thus labor productivity. Further, salary hikes in the formal sector also increases incomes in the informal economy through the so-called lighthouse effect. That is, the rise in formal sector wages signal to the rest of economic actors what a socially acceptable income should be. Finally, Balisacan’s own NEDA admits that GDP growth in the Philippines is primarily driven by household consumption and thus increasing the purchasing power of workers will have a positive effect on the economy,” Magtubo explained.

 

He furthered that “Balisacan and Diokno conveniently forget that government’s own data confirm that from 2001 to 2016, real wages were stagnant but labor productivity grew by 50% while GDP doubled. In other words, the economic pie expanded but the slice given to workers remained the same and employers monopolized all the growth. Why are they silent on this?”

 

PM contended that the P150 legislated wage hike seeks mainly to recover the lost value of workers’ wages and not yet to partake of the increased labor productivity. “Even a P150 will not raise workers’ wages to the level of a living wage, which today stands at around P1,300 per day and increasing due to unabated inflation,” Magtubo insisted.

Press Release

August 17, 2023

Adidas and Sports City should be up front about the reason for the closure of Mactan Apparel

 Workers rejoinder to the response of brand and supplier   

We call on the global brand Adidas and one of its tier-1 suppliers, Sports City, to be up front to the workers about the reason for the closure of Mactan Apparel and its two printing facilities. At the very least, transparency is the foundation for corporate social responsibility.

 

We demand honesty from Adidas and Sports City since it is as clear as day that they contradict each other in their separate replies to inquiries from the Business and Human Rights Resource Center. Adidas claims that the closures are due to the decision of Sports City to consolidate its supply chain in the Philippines. Meanwhile Sports City alleges that the shutdown was prompted by the supply chain consolidation of its buyer. In sum, nobody wants to accept responsibility for a decision that led to the loss of livelihood of some 4,000 workers. So, what is the real score?

 

Corporate social responsibility dictates that brands and suppliers must be transparent to workers who have been loyally making their garments and producing profit for the companies.

Labor group asks garment exporters group to name brand leaving the Philippines

Retrenched Mactan Apparel worker. Photo from PIO Lapu-Lapu City

 

The labor group Partido Manggagawa (PM) called on the Confederation of Wearables Exporters of the Philippines (CONWEP) to name the global brand which it said pulled its orders from the Philippines. A few days ago, CONWEP Executive Director Maritess Jocson-Agoncillo was quoted in a news story that the unnamed global brand is shifting all its orders to Vietnam and Cambodia.

 

“We ask CONWEP to name the brand so that the 4,000 workers who have lost their jobs can demand an explanation from this multinational company. Corporate social responsibility dictates that global brands be transparent to their stakeholders, especially workers who have been loyally making garments for multinational companies,” stated Dennis Derige, spokesperson of the PM Cebu chapter.

 

Last month, the PESO of Lapu-Lapu confirmed that more than 4,000 workers were retrenched by the factories Mactan Apparel and First Flory. Both are locators in the Mactan Economic Zone (MEZ) in Lapu-Lapu City, Metro City. Mactan Apparel is part of the Sports City conglomerate, the biggest employer in MEZ. Another 4,000 workers were laid off across the different Sports City garment factories at the height of the pandemic in September 2022 and then 4,000 more in September 2020.

 

“While we welcome the assistance of the Lapu-Lapu PESO and the Department of Labor and Employment (DOLE) so that the laid-off workers can engage in livelihood projects, we cannot hide the bitter truth. Shifting from formal regular work to vulnerable, insecure informal work is a huge step backwards. The normative goal is transitioning from informal to formal work. The decent work diagnostics of the DOLE and the International Labour Organization clearly states that for growth to be inclusive, the country needs to increase formal regular employment,” explained Derige.

 

PM has been pushing for a public employment program to generate jobs and a more robust unemployment insurance provided by the Social Security System. “For workers of Mactan Apparel and First Glory, guaranteed public employment is a better option in the short-term to self-employment as home-based workers, which is the livelihood program of DOLE. In the long-term, it is imperative that we have industrial policy that promotes the domestic economy instead of dependence on foreign investments which is footloose and unregulated. As CONWEP themselves admit, global brands can shift their orders on a whim thereby upending the jobs of thousands of workers overnight,” Derige insisted.

Press Release

August 7, 2023