April 28, 2011

MayDay distress call

No one – not even employers or the government – will dispute the sad state of Philippine labor today. The figures do not lie or dissemble. And yet year and year out, government and employers, merely raise their hands and feign helplessness over the situation.

They repeat the same old line: wage increases would result in inflation causing greater woes for workers including the threat of losing their jobs since higher wages could result in their employers going bankrupt.

What are hidden from view are the huge profits raked in by foreign and local corporations in stark contrast to workers’ starvation wages.

Preliminary results of the 2008 Annual Survey of Philippine Business and Industry (ASPBI) of the National Statistics Office (NSO) as cited by IBON Foundation, show that establishments in the country with total employment of 20 and over had combined profits of Php895.2 billion and 2.74 million employees.

Even more revealing, the Top 1,000 corporations in the country reaped a cumulative annual net income of Php3,788.9 billion over the period 2001-2009.

According to IBON, an across-the-board wage hike of Php125 means workers will receive an additional PhP3,802 per month. Employers will spend an additional Php49,427 per employee per year (assuming 13 months of pay). The total cost of the proposed wage hike will only be Php135.6 billion which, subtracted from total profits, will still leave establishments with Php759.6 billion in profits.

The Php125 across-the-board increase called for by the Kilusang Mayo Uno will only cut employers’ profit margins by 15%. Assuming employers will not pass on to consumers any legislated minimum wage increase, there will be no significant inflationary effect. Because their enterprises continue to be profitable, there is no reason for them to close shop.

Consider that the average daily basic pay that wage and salary workers in the country actually received – as opposed to merely mandated minimum wages that are not necessarily actually paid – increased from Php222 in 2001 to a measly Php301 in 2010 (NSO Labor Force Survey, April 2010). The minimum daily wage of Php404 in the National Capital Region is not even half of the estimated average family living wage (FLW) of Php988 as of March 2011.

A large wage hike will be beneficial not just for workers and their families but also the economy, IBON added. The transfer of money from rich to poor households will increase aggregate demand and stimulate the economy.

Mr. Aquino washes his hands and points to regional wage boards and collective bargaining agreements as the proper means to effect any wage adjustment; the former (dominated by business interests) are notoriously niggardly in providing wage increases while labor repression and the policy of labor flexibilization have decimated the ranks of organized labor and consequently their bargaining leverage.

The other demands raised by militant labor are not unreasonable and quite “doable” by a government that presents itself as committed to serving the people as its “boss”. The more pressing ones include control of runaway prices of oil, electricity, water and food; a stop to privatization and greater public subsidies for public transport, education, health and housing; and a halt to contractual and other forms of flexible work in the country that undercut labor rights and welfare.

Government should not be earning windfall taxes from the unconscionably high fuel prices. Because of the 12% VAT on oil products, the higher the prices, the more taxes collected. Why can’t government immediately suspend VAT on oil as a reprieve for everyone, especially the poor, who bear a disproportionate burden of this indirect tax.

Why doesn’t the government go hammer and thong against profiteering by the local oil cartel of Shell, Caltex, Petron? As pointed out by militant transport and consumer groups, oil companies either jack up prices or fail to roll them back even when warranted by taking undue advantage of the volatility of oil prices in the world market. It is estimated that as much as 7.50 pesos per liter is added on as sheer profiteering.

Note that we are not even talking about the mind-boggling profits of the global oil cartel and finance capitalists derived from monopoly pricing and speculation in the oil futures market.

The subsidies for public mass transport such as the LRT/MRT and the toll fees charged on vital roadways such as the SLEX could have been maintained given the critical situation of the majority of families who are at their wit’s end trying to make both ends meet.

Instead, Mr. Aquino says that government can do nothing to shield commuters but must instead protect the profits of the foreign investors who upgraded the SLEX or make the operations of LRT/MRT profitable so that government can make them attractive to private investors, in a word, reprivatize this public transport system.

Bringing home such a pittance of a wage would be somewhat bearable if government could be relied upon to give meaningful help when it comes to education, health and housing but that is like asking for the moon.

On the other hand, government has justified labor contractualization as a legitimate tool of capitalists to cut labor costs. According to the Ecumenical Institute for Labor Education and Research, the Philippines has one of the highest levels of contractualization in Southeast Asia with 7 out of 10 firms implementing combinations of flexible work arrangements.

KMU underscores that while contractual and regular workers both suffer from unjust labor policies and work agreements, the former are laboring under worse conditions-- lower incomes, lack of job and social security, no right to union organizing and extremely hazardous work conditions.

Over and above pro-labor policies and cognizant that the workers' wellbeing is inseparably linked to the wellbeing of their fellow toilers, KMU has from the beginning called for genuine land reform alongside national industrialization as the twin pillars of a sound, self-reliant, progressive and just socio-economic order.

Unfortunately under the present dispensation, economic policies are set by government officials who are beholden to multinational and domestic corporate interests as well as the landed elite. They are former CEOs of business conglomerates, bankers and fund managers, if not former IMF-WB highly-paid employees hewing to the neoliberal policy framework that has caused mayhem for the last three decades.

The country’s economic managers are appointed by politicians like President Noynoy Aquino who, despite populist rhetoric, also comes from the very same elite ruling circles.

It appears then that the interests of the entrenched local elite and their foreign backers are uppermost in Mr. Aquino’s priorities as he turns a deaf ear to the demand for a just wage, champions the privatization of government projects and programs and justifies more cutbacks in government social spending.

On the other hand, the severity and persistence of the global economic and political crisis is shaking ruling systems everywhere with mass protests, uprisings and revolutions spreading like wildfire, bringing to heel or even ousting ruling regimes and pushing more fundamental and radical reforms.

Mr. Aquino, for his own political health, should consider granting some reprieve to an agonizing people by positively responding to militant labor’s demands to be highlighted at the planned May 1st Labor Day demonstration. #

Published in Business World
29-30 April 2011


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