The system is upside down

By Rod Kapunan

Like the lowering of tariff, our economic geniuses believe their “bright” idea would help curb, if not eliminate, smuggling.  The same formula was adopted for our wage and employment system by these people on whose loyalty we can never rely.  They pressed hard for the deregulation of our currency while sticking to the system of regulated or legislated wage, thus turning that upside down.  That system today stands as a ticking time bomb and a curse that has led us to become one of the poorest countries in Asia.

The latest survey released by the Social Weather Stations revealed that as of the last quarter of 2013, unemployment soared to 27.5 percent.  In layman’s terms, that means an estimated 12.1 million of our people are without job, or could not find employment.  That survey delivered a stunning blow to the bluff of this pretending-to-be-honest government of having achieved an unprecedented economic growth of 7.2 percent in gross domestic product for the last quarter of 2013, dubbed by its trumpeters as the “fastest in Asia” even threatening to overtake China.   The figure is alarming because it means a leap of 21 percent, or from an estimated 2.6 million unemployed as of October 2013 to 12.1 million.  

Many suspect the ridiculous snide made by President Aquino of comparing China to Nazi Germany was a diversionary tactic to plug the leaks in his artificially floated popular image.  Tickling the ego of those pro-American fanatics would serve to reinforce that pillar.  This observation is not far-fetched because the latest unemployment survey fell flat on his face.  More of our people now are denied of their remaining lifeline to economic survival.  Not by hindsight, they also pay P12.21 per kilowatt hour for their electricity and P30 per cubic meter for their potable water, thus making this doggone country the highest in Asia.  They equally pay P54 for unleaded, and P44 for diesel per liter for their fuel and a pending increase in LRT and MRT fares.

PNoy is bragging about the phenomenal GNP growth his administration has achieved.  

However, the survey tells the opposite.  The economic hardship which our people are undergoing to hurdle the steep increases in the prices of essential commodities is compounded by the relatively static wage they receive, and now threatening their very employment.

Quite surprising is that the minimum wage in Metro Manila ranges from P429 to P466 daily, thus making us one of the highest in Asia, something incompatible to a bedraggled economy like us.   If one would include the “plus-plus” factors, like the SSS, Employees Compensation, PhilHealth, Pag-Ibig and pro-rating the 13 month pay, employers would be paying their employees close to P550 per day, a staggering amount that has devastated both our “comparative advantage” and for our local businessmen to rightfully earn profit.  In fact, that represents the backbreaking net profit an employer must earn to pay a worker for his day! 

As one economist would put it, even if this pretending-to-be-honest government would be able to plug the increases in basic commodities, that would not stop the diminution in the purchasing power of the wage earners because of the dogged loyalty of our economic managers  to the imposition of their imperialist masters.   First, by the automatic increases paid by consumers for the currency exchange rate adjustment (CERA) imposed by privatized state-owned enterprises.  Second, by the unmitigated remittances on winnings by gamblers in the “casino economy” for their portfolio investment.  Third, by the ever-increasing debt service for which close to 50 percent of our annual budget is allocated. 

Because of our inverted economic formula, we have become the laughingstock in Asia.  While all are laboriously marching to advance, we, on the other hand, are marching backward.   We claim to be one of the highest in minimum wage in Asia, but that is more of a baloney.  The high minimum wage we claim has not pulled upward our per capita income.  Rather, ours has remained marginally low at $4,430 as of 2012 compared to Singapore with $60,410, Brunei $54,399, Malaysia $16,922, Thailand $10,126, and Indonesia $4,977.   We only managed to slightly edge Vietnam $3,548, Laos $3,011, Cambodia $2,402 and Myanmar $1,405, which are new players in the race to industrialize. 

If underemployment rate of 17.9 percent as of October 2013 is taken into account, an increase by 21 percent would correspondingly swell underemployment to around 38.9 percent.  With that, we could well surmise that close to around 30 million of our people are receiving below the minimum.   It is not correct to classify underemployment as those working below 40 hours a week because to work less than that number of hours often results in them earning below the minimum wage.  Rather, most underemployed should be classified as self-employed much that employers here observe the system on a daily and not hourly wage. 

 To make matters worse, even among “Class A” employers, like multinational firms, giant department stores and retail chains, and franchise operators of restaurants now routinely engage the services of contracted-out or agency-supplied labor force.  Considering that contracted-out workers are classified as temporary, their classification in our labor force has become  ambiguous, much that they could easily be terminated even without a valid cause, notwithstanding that contractualization has contributed to the withering of trade unionism in this country.  Minimum wage violation has become rampant that to compel them to pay the minimum is likely to drive them out of business.  

In fact, there has been an increasing drop in the number of SSS members not paying their monthly premium.  This has been attributed to an increasing number of contractual workers who could no longer continue their monthly premium after losing their job for non-renewal of contract.

This explains why we ended up experiencing an unwanted paradox of having to constantly increase an “ampao” minimum wage while correspondingly trimming down our labor force.  For that, we now stand as the “funny man of Asia” for as a poor country grasping for foreign investment, our local manufacturers are relocating in mass their production elsewhere because of high labor cost, and only for our people to buy them without the thought that for every penny we spend on imported item, our economy is pushed closer to the precipice.

rpkapunan@gmail.com.