Labor Yearender: Workers caught between shrinking amounts of products and shrinking value of wages

 

The cost of living crisis in the country is expressed, on the one hand, in the deflation of real wages and, on the other hand, in the shrinkflation of commodities. Caught between shrinking amounts of products and shrinking value of wages, workers are reeling from hardship during the holidays. No wonder that a survey has shown that one of every four employees prefer to monetize the Christmas parties held by companies for their workforce. It is better to have money in the pocket than to have fun with workmates.

 

In 14 out of 17 regions, minimum wages were increased by PhP 30 to Php 40 in the second half of this year, bringing them to a high of Php 610 in Metro Manila to a low of PhP 368 in Zamboanga Peninsula. However, the equivalent real wages remain depressed. The real wage in Metro Manila is only PhP 504. That is, PhP 610 in 2023 can only buy the equivalent of PhP 504 in 2018, or a gap of PhP 106.

 

The difference between nominal and real wages is a result of inflation over the years: wage hikes have not kept up with the rise in prices and so workers’ purchasing power has been depleted. The nominal versus real wage gap ranges from PhP 63 in Zamboanga Peninsula to PhP 108 in Central Luzon. Thus the necessity for Congress to plug the gap by enacting the bill for a PhP 150 salary increase.

 

The minimum wage adjustments were a belated response from the government to organized labor’s demand for salary increases since last year. In December 2022, the group Kapatiran ng mga Unyon at Samahang Manggagawa filed a petition for an additional PhP 100 in minimum wage so that workers can recover their lost purchasing power. Similar petitions were filed in Calabarzon, Cebu and Western Visayas. The wage orders from the different regional wage boards then fell short of the wage recovery demand. Expectedly, real wages stayed deflated despite the latest round of minimum wage hikes.

 

Shrinkflation is just one problem facing workers and the poor. Rice cannot shrink and so its price continues to rise. One kilo of rice today costs from PhP 52 to PhP 68. The onset of El Nino next year is bound to push the price of rice even more. As a pre-emptive move, President Bong Bong Marcos Jr. has already extended the tariff cut on imported rice up to the end of next year to ease rice inflation. Still, this is a band aid solution. His election promise to bring the cost of rice to PhP 20 per kilo is even further from reality.

 

Food in general remains the biggest expenditure for ordinary households. This reveals not just the survival challenges for the working class but the underdevelopment problem faced by Philippine society. Higher expenses for non-food items are a characteristic of more developed countries.

Press Statement

December 27, 2023