Think tank backs P690 hike in daily wages

IBON Foundation said it is proposing a P690 across-the-board increase in daily wages to bring worker pay more in line with the prevailing cost of living.

“The National Capital Region has the largest minimum wage of all regions at P610, but this is a bit more than half (51%) of the P1,197 living wage (for a family of five),” IBON said, citing the results of a study.

It said such an increase will address wage injustices and ensure that nominal wages keep pace with the cost of living, providing “substantial immediate relief” to workers and their families.

Federation of Free Workers President Jose Sonny G. Matula said in a Viber message to BusinessWorld: “Given the rising cost of living and ongoing inflation and the high rate of hunger as shown by the Social Weather Station survey, even a modest wage increase is critical.”

Renato B. Magtubo, chairman of Partidong Manggagawa, in a text to BusinessWorld, concurred, but warned of possible negative effects on employers and the economy.

“The proposal will face enormous challenge(s) from employers. Economists also believe that a P690 wage increase would not be beneficial to the economy,” he said.

Mr. Matula countered that a wage increase can have “broad positive impacts” on the economy.

“By ensuring that more money remains in the hands of workers, we are not only supporting individual livelihoods but also fostering overall economic growth. Workers typically spend their earnings within their local communities, benefiting local manufacturers, producers, and the informal economy,” he added.

Between 1989 and 2023, while worker productivity  increased by 88% after adjusting for inflation, the minimum wage declined in real terms by over 22%, IBON study found.

IBON added that giving workers the equivalent of 50% of profits is “more than fair” given the years in which employers earned outsized profits while paying workers low wages.

Mr. Matula urged employers to share their profits and invest in a “stable, productive workforce.”

“This approach is not only beneficial for workers but also the economy, driving growth and prosperity across communities,” he added.

Wage increase bills are pending in the House of Representatives and the Senate, with proposals for increases ranging from P100 to P750.

“The proposal for a P690 increase in the minimum wage would greatly help workers and their families cope with the rising cost of living,” Mr. Magtubo said.

Meanwhile, another IBON study found that the real number of unemployed in February was 7.5 million, as opposed to the Philippine Statistics Authority estimate of 1.8 million in its Labor Force Survey.

“This estimate includes… the 3.8 million unpaid family workers who should not really be counted among those employed,” IBON said in its study.

It added the lack of jobs hits the younger generation the worst. IBON said in February, those aged 15-24 holding jobs fell to 6.2 million from 6.8 million a year earlier.

“This is concerning since youth employment is key in achieving the hyped demographic dividend, or when the increasing share of productive working-age population with higher incomes results in faster economic growth,” it said. — Chloe Mari A. Hufana