Low wages equals slow growth
The country’s biggest labor group said the government had only itself to blame for the economic slowdown in the third quarter of this year, as it had failed to ensure that people had enough income to afford basic commodities and services.
The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said that the slowdown in household consumption indicated that wages were “no longer enough to buy essential necessities and pay for basic services.”
This would eventually affect the country’s competitiveness, ALU-TUCP said.
“With more and more workers and their families experiencing poverty, [we are] looking at lower productivity,” said Alan Tanjusay, ALU-TUCP spokesperson.
Dip in spending
On Thursday, the National Economic and Development Authority said the country’s economic growth slowed down to 6.1 percent year-on-year in the third quarter.
This was mainly driven by a decline in household expenditure at 5.2 percent, the slowest since 2014, particularly on food spending, which slipped to 2.8 percent from 6.2 percent in the second quarter.
ALU-TUCP and three other labor groups have called on the government to abandon its “obsolete” regional wage-setting mechanism in favor of a national minimum wage of at least P750.
This would allow workers and their families, especially those in the provinces, to afford basic commodities and services, the labor groups said.
Partido Manggagawa said the region-based approach of the Department of Labor and Employment in setting wages no longer worked because the cost of basic commodities and services in the provinces were already at par with those in the National Capital Region (NCR).
Outside Metro Manila
While inflation in NCR slightly dipped to 6.1 percent in October, it remained high in the provinces at an average of 6.8 percent.
Of 16 regions, 13 recorded last month a much higher inflation rate than Metro Manila, with Bicol posting the highest at 9.9 percent.
Nationwide, NCR workers get the highest minimum wage which, later this month, would be pegged at P537 per day.
Workers in Bicol get a minimum daily pay of only P305, even if prices in the region were sometimes higher than in Metro Manila.
“This is enough basis to abolish the regional minimum wage fixing and replace it with a mechanism that provides a national minimum wage,” said Partido Manggagawa chair Rene Magtubo.
“Workers’ wages should be determined on the basis of the job or function that they perform not on the location where they are working,” he added.
Tanjusay said it was time to revisit Republic Act No. 6727, or the Wage Rationalization Act, as this “no longer faithfully balances the interests of workers and businesses.”
“We have to devise a new and evidence-based wage-setting process,” he said.
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