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50% power cut, not wage hike DIE HARD III Herman Tiu Laurel 05/21/2012

Monday, May 21, 2012

50% power cut, not wage hike

Herman Tiu Laurel
The newspapers have just reported that the Metro Manila Wage Board approved a P30-minimum wage hike to be factored into the “cost-of-living allowance” and given in two tranches. Some labor groups that demanded a P125-daily minimum wage increase described the wage board’s decision as “loose change.”

Acting president of the Employers’ Confederation of the Philippines (Ecop) Rene Soriano questioned the move, asking, “Will the wage increase create jobs? The resounding answer is no,” adding that the increase would, in fact, worsen the conditions of vulnerable workers.
This tit-for-tat between the labor and business sectors goes on every year with the same predictable outcome — an unhappy compromise where both lose and the employable unemployed lose even more.

According to Dr. Rosalinda Pineda-Ofreneo, professor of the UP College of Social Work and Community Development, the entire informal sector constitutes around 24.6 million informal workers and operators, or 76.34 percent of the country’s labor force. Well, the recent minimum wage hike just pushed that figure higher.

The Kilusang Mayo Uno (KMU) claims that workers have no reason to be happy with the small wage hike granted by the wage board. Its secretary-general Roger Saluta says, “It’s another reason to intensify the struggle for a legislated wage hike.” So, every year, the KMU revs up for the perfunctory “struggle” then settles for the predictable “loose change” while continuing to charge fees from its members to keep itself going.

The unionized labor force in the Philippines, according to one report in Bulatlat.com, has dropped from a high of 2.97 million 20 years ago to 319,408 in 2010 or 10 percent of the wage earners in the country and less than one percent of the country’s labor force. The underground economy is now reported to be 70 percent of the national economy; and of the more or less 40 million labor force, 35 million are invisible to the formal, legal system of wages, incomes, social security and benefits. Workers and employees in the underground economy have a free-wheeling, negotiated wage system — and maybe that’s why this sector is thriving and growing at the expense of the formal economy.

During the discussions and debates on the latest wage hike petition, one focus of interest was the comparative levels of minimum wages in the Asean and Asian regions, with the employers’ side highlighting the $10 per day in the Philippines in relation to Vietnam’s $2.20, Cambodia’s $2, Indonesia’s $5.20 to 5.90, and China’s $3.75 to $5.

KMU reacts saying most Asean and Asian counterparts may be receiving lower minimum wages but their living conditions are way better because of lower local commodities and services costs, and higher purchasing power. Moreover, in reaction to BS Aquino III’s rejection of his group’s wage hike demand, KMU chairman Elmer Labog adds, “The problem with the President is that he is always taking the viewpoint of the foreign investors, never of Filipino workers.”

The problem with both of them — Aquino and Labog — is that they never take the viewpoint of the real engine — the drivers and workers of the real economy — the SMEs (small and medium enterprises), which constitute 95 percent of Philippine businesses and employ the vast majority of both formal and informal sector workers.

Every year, this charade among the three parties in the wage issue — government, labor and employers’ representatives — is played out without ever resolving the matter to the benefit of our people and economy. The growing hardships of the working class are never solved in any wage boards since there are more fundamental problems that the decision makers know of but have nary the guts nor will to confront decisively.

Of course, foremost of these problems is our country’s “highest power rate in Asia” that’s debilitating every aspect of Philippine life and livelihood. Hernan Nicdao admitted this much on a GNN show. After reciting labor’s mantra, the talk shifted to the Filipinos’ standard of living and, inevitably, to the price of electricity.
The Trade Union Congress of the Philippines (TUCP) had already demanded government action on this problem late last year. But as it was unfortunately not sustained, then it’s back to the old charade.

Jojo Borja of Iligan Light and Power called me last weekend to report that their power utility company’s retained earnings the past year alone exceeded their authorized capital despite an electricity rate of only P5.50 per kilowatt-hour (kwh) and a customer base of only 60,000, which from all angles, is a fantastic, if not immoral, return for the company that Borja blames on the Electric Power Industry Reform Act (Epira).

Thus, Borja also wonders how much more a giant utility company such as the Manila Electric Co. (Meralco) is raking in since it charges P12 per kwh with a customer base of almost 6 million and with the majority of industry and commerce situated in its 9,337-square kilometer-franchise area, where the concentration of the national economy is.

It is very clear from the example of Iligan Light and Power that electricity rates in the country can be brought down dramatically and radically — if only the will to demand and achieve it is there. That will certainly do all the workers of the Philippines — in both the formal and informal sectors — greater good than all the past and future tripartite wage negotiations can ever hope to attain.

(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN’s HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m.; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
SourceThe Daily Tribune

URL: http://www.tribuneonline.org/commentary/20120521com5.html


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