Minimum wage, living wage

The National Capital Region (NCR) regional tripartite wages and productivity board (RTWPB) recently issued an order raising the minimum wage by P35/day.

Predictably, various labor groups and their allies claimed the increase was a gross insult to workers as they persisted in pushing for an unrealistic increase ranging from P150-P750/day.

These groups are fully aware that such a hike will result in an unaffordable monthly pay ranging from P21,736 to P38,896 which will include the ensuing additional payroll cost of 30 percent for the rise in base pay such as for overtime, 13th-month pay, retirement benefits, legal paid leaves, and the statutory contributions to state welfare agencies.

It will not be difficult to imagine how a typical micro or small enterprise with average annual sales of P3,000,000 can survive paying its 10 employees the adjusted annual wages ranging from P2,825,680 (based on P150/day) to P,056,480 (based on P750/day), which will result in a NEGLIGIBLE surplus of P44,490 or a LOSS of P2,186,610, respectively, delusively assuming all other operating costs are FREE.

Additionally, NEDA announced the anticipated loss of 140,000 jobs in the NCR following the recent P35/day wage increase. While there is no linear relationship between a wage increase and loss of jobs, with a P150 or P750 per day wage hike there will be an exponential rise of lost jobs in the MILLIONS not only from manpower downsizing but from the total closure of companies.

Although NEDA claims the job losses in NCR will be compensated by increased employment in the agricultural sector, the displaced workers in NCR may have to relocate to agricultural regions. Else, there will be 140,000 families lining up for “ayuda” under the government’s 4Ps program.

Some organized labor leaders may be negotiating in bad faith before the wage board, as they readily denounce any wage order with preplanned street marches brandishing recycled placards and slogans and staging demonstrations accompanied by a barrage of stale press releases.

These leaders blur the difference between a living and a minimum wage and persist in deluding their members that these wages are one and the same. This false narrative is bolstered by sympathetic columnists and legislators.

The incontrovertible distinction is clearly defined and understood even by a budding labor union organizer.

The minimum wage is the mandated floor or entry level pay for unskilled and new entrants to the labor force set by the different regions after considering all economic factors, including the capacity of the employers to pay and keep the business viable.

In contrast, a living wage is a THEORETICAL wage level in an IDEAL economy where workers receive fabulous wages from companies which earn assured desirable incomes and could easily pay the workers’ living wages, its operating expenses, its financial obligations to creditors, its corporate social responsibilities, the right taxes to government, and give a fair return to its shareholders.

Some labor leaders are overdramatizing their role and portray themselves as heroes in the mold of Robin Hood, invoking the timeworn abuses and the social injustice of slavery in the medieval period.

Some hyperbolize Karl Marx’s discredited theory of a class struggle between the employing and the working classes by exaggerating their economic disparity.

This alleged injustice and economic inequality have been addressed aggressively and continuously by responsive governments and enlightened business leaders.

Since 1989 when regional wage boards composed of tripartite partners from labor, government and employers started issuing minimum wage orders, the workers and employers have learned to cope with the tough economic reality that minimum wage concerns will always be a constant debatable and unsettled matter in the competitive world of business. Yet, life in the factories and business establishments goes on even as the minimum wage question remains an annual polarizing agenda in the workplace.

The routine reaction of some labor groups and their sympathizers after each wage order is like watching a rerun of the same old movie. Some labor leaders mobilize their prearranged street marches, hold demos before government offices, and issue self-serving press releases until the passion cools down and their members continue to pay their union dues without fail.

Philippine employers are numbed by the unending wage increase petitions and they disagree with the American statesman Benjamin Franklin who said, “In this world nothing is certain but death and taxes.” He failed to include a third — the regular annual wage increase in the Philippines.

It will be tragic if the wheels of the national economy will stop turning as business owners, mostly of hand-to-mouth micro and small enterprises, will march on the streets in “sandos,” shorts and slippers to protest the unstoppable annual wage orders to protect their businesses.

Perhaps only Divine Intervention can help this country from self-righteous destructive ideologues posing as champions of the “poor workers” but who fail to see the big picture.