Balancing interests
Few days ago, I saw a Facebook post of a man walking on a rope, each end of which was tied to two tall buildings built across each other somewhere in New York. Funambulism is the technical term for the art of walking on a tightrope. Hundreds of people on the street were then held in awe. To many watchers, the act was breathtaking. What a splendid show! Others, however, feared for the funambulist’s life. They were afraid that a missed step or a lost balance would plummet him to certain death.
True to the off-tangent nature of this column, I want to talk about another kind of balancing act which has nothing to do with walking on a tightrope. Today, I will employ the term “balancing interest”, a Constitutional Law concept. But, in order to unsheath it from its legalese perspective let me quote the internet, which defines this phrase as a standard used when courts need to balance conflicting social values and individual interests, and requires a conscious and detailed consideration of the interplay of interests observable in a given situation.
Senate President Juan Miguel Zubiri, filed Senate Bill No. 2002, the proposed Across-the-Board Wage Increase Act of 2023. His measure seeks an increase of ₱150 in the daily pay of all workers in the agricultural and non-agricultural industries “regardless of capitalization and number of employees” of the employers. The goodness of the senator’s intention was evident when he said a “decent life costs a decent wage.” Zubiri is addressing the interest of laborers numbering millions. But he should balance the scale by considering the side of the employer.
Ato lang ni nga tinambanon. Roughly speaking, a Cebu City non-agricultural worker receives a daily minimum wage of ₱435 at present. Normally, a company here in our city does business from Monday to Friday, a five-day workweek. So, in four weeks, the employee gets an average of P8,700. If Sen. Zubiri succeeds in having his bill approved, the Cebuano worker will get a monthly increase of ₱3,000. All told, he gets ₱11,700 per month salary. The vast majority of our working class applaud this Zubiri bill. The employee will be happy because his interest which is put in one bowl of the balancing scale is served with a 35% additional weight in the form of this proposed wage hike.
Let us place in the other bowl of the scale the interest of the employer. Suppose the employer is a small car repair shop with a workforce of 10 personnel. The owner who generates a daily revenue of ₱8,000 earns ₱160,000 a month. But he pays ₱87,000 to his workers, ₱20,000 for body building and welding implements and painting materials, ₱8,000 for power and other utilities. I am just counting the most visible needs to run such a shop. After paying for these expenditures, he realizes an income of ₱45,000. The Zubiri bill, if approved, reduces his monthly earnings. Even if only the salary portfolio is increased to ₱117,000 and the cost of everything else remains the same, the car shop owner will only get an income of ₱15,000, a month, a 2/3 dip or ₱30,000 in money. For him to maintain the level of his monthly income, he has to terminate two or three employees. And if many other hundred thousands of businessmen will be similarly situated, how many Filipinos will be without a job!
The figures, calculated by a non-economist like me, will vary among employees and employers. My estimation though is that after balancing all interests, the Philippine economy will more suffer than gain if this Zubiri measure gets approved.
"The Philippine economy will more suffer than gain if this Zubiri measure gets approved."