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
