Abolish regional wage boards now

THREE Makabayan block representatives filed on Sept. 16, 2022, House Bill 4898 seeking to establish a national wage for private sector workers and in the process abolish the existing regional wage boards.

The measure, authored by Rep. Arlene Brosas (Gabriela Women’s Party), France Castro (Alliance of Concerned Teacher’s party-list) and Raoul Daniel Manuel (Kabataan partylist), aims to create a National Wages and Productivity Board (replacing the National Wages and Productivity Commission) and abolish the 17 Regional Tripartite Wages and Productivity Boards created under Republic Act 6727.

In the explanatory note prefacing the House bill, the authors surmised that the “Filipino workers have weighed in on the regionalized wage scheme through its 33-year history and found it a big failure. They are now demanding that it be scrapped and for the Philippines to return to the regime of a uniform national minimum wage that is based on the family living wage.” It cited an example of the regional wage boards’ irrationality:

“The irrationality of the regionalized minimum wage scheme is brought to focus if we note that the poorest regions in the country have the lowest levels of minimum wage. The fact that the prices of oil and other petroleum products generally get higher as the region gets farther from Metro Manila exposes the unfairness and inequity of the present regionalized wage regime. This is telling of the unjust theory behind the scheme: a worker living in dirt-poor BARMM is not entitled to the wages that workers earn in high-standard and well-off Metro Manila even though that worker has the same productivity skills as his counterparts in Metro Manila. This injustice feeds on another injustice: it preserves the economic inequality among regions and between the poor regions and Metro Manila and resultantly perpetuates the poverty of these poor regions and their workers.”

These were the exact sentiments of those who attended the breakout session on “Workers Productivity and Labor Standards” during the 1st UP Leadership Forum held on Sept. 10, 2022 at the UP Campus in Bonifacio Global City, Taguig. I had the honor to facilitate and moderate the discussions in the breakout session.

Mr. Vic Marasigan, president of the Philippine Ecozone Business Club and senior vice president of Masspower Philippine Electronics Inc., shared with the participants his company’s own experience relative to the non-uniformity of minimum wages across territories. Marasigan lamented that their workers in Dasmariñas, Cavite have been transferring to their branch in General Trias, Cavite in order to get a higher minimum wage due to the wage distortion created by the regional wage boards.

Another effect of the absence of a national minimum wage, which most do not see, is the worsening traffic situation in Metro Manila. Since Metro Manila has the highest mandated minimum wage, workers from other regions migrate and travel to Metro Manila purely to work and enjoy the higher wages here. The weekly exodus of workers to and from the metro has resulted in traffic chaos everywhere.

Institutionalizing a national minimum wage would prevent such an emigration and level the workers’ playing field in between regions.

The Japan International Cooperation Agency estimated that P5 billion is lost daily due to the congested Metro Manila roads. Economic losses could swell to P5.4 billion a day by 2035 if the issue is not properly addressed.

TopGear Philippines published in November 2021 a study on the yearly costs of sitting in rush-hour traffic in different cities across the world. The average motorist in the National Capital Region spends an astonishing 188 hours stuck in traffic annually, which is equivalent to a total monetary loss of $1,120. Using the present dollar-to-peso exchange rate, this is approximately P65,000 per year (roughly P5,417 per month) or P270 per day (using 20-day work days per month).

Instead of wasting this P270 per day, why not add it to the minimum wage and create a better life for all?

Workers’ productivity

Data from the World Bank’s World Development Indicators database show the Philippines among the laggards in labor productivity performance. Productivity among the Philippines’ employed labor force amounted to $20,630 per worker in 2020, down 5.6 percent from 2019. The productivity rate is measured in terms of US dollar output per annum per worker.

Among the 18 economies in East Asia and the Pacific with available data on labor productivity, the Philippines ranked 12th. In terms of year-on-year performance, however, the country was only better than Mongolia, which saw a 7.4 percent annual decline during the same period. The top three economies with the highest worker productivity rates are Singapore ($161,287 per year per worker), Brunei ($136,815) and Hong Kong ($117,127).

Labor productivity in the Philippines during the last four decades was continually declining, according to a 2021 published thesis of Prof. Aida L. Velasco of the De La Salle University College of Engineering. She concluded, “It has shown a negative growth rate over the past decade and, if unchecked, will cripple the needed economic growth.” Well, as it is, our workers’ productivity would continue to decline, and eventually, there will be no more.

There is a recent observable happening that is worth the time of employers and production managers to study. An employment trend known as “quiet quitting” — clocking in and doing the bare minimum at work — isn’t just a niche phenomenon, according to a Gallup study. The polling organization found that more than half of workers routinely practice it on the job.

This newly coined term, for when workers only do the job that they’re being paid to do, without taking on any extra duties, or participating in extracurriculars at work, is actually considered an act of resistance.

So, with quiet quitting in the workplace and the consistent decline in workers’ productivity, the future of the domestic Philippine labor force looks bleak.