Tuesday, July 23, 2024

The Raise We Really Need

by the Weekly Sillimanian | March 24, 2022

Fuel prices all over the world have been increasing dramatically in the last few months — and the Philippines is not immune from such an issue. Given that Russia is one of the world’s leading oil producers, the current Russo-Ukrainian war has indirectly affected our country through the price increase of basic commodities.

This has led to many minimum wage workers barely scraping by. Hence, several labor groups all over the nation have petitioned for an increase in minimum wages. And people of authority have responded, but according to them, raising wages is not as simple as it seems.

Despite all of these, the Weekly Sillimanian believes that ensuring the needs of workers is possible without compromising our enterprises.

The reasons to increase the national minimum wage are plain and simple. As previously stated, the rise in fuel prices has resulted in the increase of basic commodity prices. Therefore, the pay workers currently receive is not enough to fulfill their basic needs. And when food is afforded, they do not have a choice but to settle for low-quality or unhealthy options, leading to hunger and malnutrition. In addition to this, especially in big cities, fees for public transportation can also take a significant chunk of one’s earnings when commuting to work is required daily.

Let us also not forget those that secure our local access to food. Without the means to buy fuel and fertilizer, farmers and fisherfolk are unable to use the necessary tools to fulfill their livelihoods. So, given all these expenses, the current minimum wage is simply not enough for one to live comfortably.

Additionally, President Rodrigo Roa Duterte has recently approved the subsidy of the monthly P200 for the “bottom 50%” of the nation. However, the excise and value-added taxes on fuel products prevail. The subsidy is also good for just one year, which means that each recipient would only receive a mere P2,400. Given the increasing prices and the taxes, will such an amount be enough for the needs of the workers?

Presidential Adviser for Entrepreneurship Joey Concepcion argued that we should not hurry with the increase of the minimum wages. He said that our economy has barely recovered from the COVID-19 pandemic and it might not be able to afford the wage hike. He additionally noted that “fuel price hikes may only be temporary” and the Russo-Ukrainian war may end soon.

But the pressure brought by price increases will be detrimental to the overall economic balance of the country. The wage-price spiral, or when there’s inflation but little to no increase in wage rate for workers, will develop in the country, therefore putting pressure on the employer’s end to further raise prices for common goods and services to meet the normal living costs for workers. This might create another round of price hikes as company owners or employers need to keep up with the inflation rates and stabilize the standard of living for the workers.

While we understand the potential effects of the wage increase on businesses, especially small ones, waiting on this issue would only lead to the hunger and suffering of more workers. We also cannot guarantee that the conflict between Russia and Ukraine will end soon. While we can hope that it gets resolved immediately, getting prepared for the worst now would be wise. 

The Weekly Sillimanian urges the National Wages and Productivity Commission and the Regional Tripartite Wages and Productivity Board to determine a decent wage increase that enterprises can afford and workers find adequate for their necessary expenses. Additionally, we call on the lawmakers of our country to continuously push for the proposed four-day workweek so expenses on transportation can be diminished. 

The nation’s economy cannot cope with inflation alone. Workers should also be compensated according to the standard of living given the specific economic scenario. The labor force is crucial to keep the economy in check amid the global instability. When workers get more productive, they can really impact the economy. 

Let’s start with the grassroots — the human capital before we consider our macroeconomics.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest articles