| DIE HARD III |
 |
| Herman Tiu Laurel |
05/07/2012
The growing clamor for a minimum wage increase to allow formal sector
workers to mitigate some of the many cost of living increases may be
justified even while it is wrong. That’s because the real task of
government is to control, restrain and constrain galloping price hikes
that have overtaken consumer purchasing power by two decades forward.
The
basic drivers of the economy — fuel, power, water and food — are at the
base of our cost of living pyramid. In three of these, the Philippines
is already the highest or thereabouts in the whole of Asean and Asia.
It
has been quoted that the minimum wage in the Philippines is already at
$9 per day to Cambodia’s $2.24, Vietnam’s $2 to $3.21, and Indonesia’s
$3.15 to $5.27. Yet Filipinos are worst off especially in electricity
and food prices. Notably, the Philippines is also the most aggressive in
its economic liberalization and privatization. Surely, the connections
must be obvious by now.
Minimum wage increases really punish the
SMEs, or small and medium scale enterprises, which account for 98
percent of Philippine businesses and contribute at least 50 percent of
all employment. The margins of SME businesses are very thin such that
additional costs constantly squeeze their viability to the hilt. I
should know; my family runs an SME employing a few hundred workers.
In
the squeeze of power and fuel costs, municipal as well as national fees
and taxes, not to mention exploitative real estate costs, additional
minimum wage orders can easily tip the books into the red. Giant
corporations, meanwhile, don’t have these problems. Their power, for
one, is subsidized by us residential consumers and SMEs, thereby
financing their costs lower by as much as 50 percent.
Worse, the
wage distortion created for longtime employees is even onerous — as
Chris, a texter to my radio program puts it: “I have been at my work for
15 years but the new employees coming in are almost matching my
salary.”
In addition, more minimum wage increases can only push
SMEs into the informal sector, which already employs 27.3 million
workers as compared to the formal sector’s 5.6 million. Thus, the wage
increases will constrict the informal sector workers’ ability to move up
the wage ladder as formal sector SMEs are prevented from hiring them,
owing to fears of violating the minimum wage law.
Besides that,
other SMEs are going to be compelled to go the route of the Barangay
Micro Business Enterprises Act by breaking up their formal SMEs into
smaller units in order to fit the BMBE structure and offer jobs with
commensurate wages — that is, if they still register at all.
Finally,
the illogicality of the present system is described aptly by labor
sector analyst and writer Rod Kapunan, who long ago criticized the
“deregulated economy with a regulated wage regime,” which is a guarantee
for a dysfunctional economic system. And, as seen by the world last
week when CNN featured the “pagpag” (or recycled garbage) eaters of the
Philippines, we are experiencing the damaging effects of it today.
At
the root of the decades-old Philippine economic degeneration are the
policies of deregulation and privatization. This is so evident in the
Philippine power industry now known as having “the highest power cost in
Asia” with its ironies highlighted by the recent Mindanao power
imbroglio of having lowest cost hydroelectric power but force fed with
high priced power, as power barges were left idle due to an
ill-conceived power law.
Although so far, Mindanaoans have gotten a
tentative, if not halfhearted, commitment from government that it will
desist from privatizing the prized Agus-Pulangi hydroelectric complex
and will limit the duration of high priced contracts with independent
power producers, these measures will eventually be overwhelmed by
privatization unless a reversal is made via re-nationalization, such as
in Bolivia which this week nationalized generating assets of Red
Electrica de España for “inadequate investment” (the same way Filipino
power companies limited investment in new energy sources by merely
taking over state power assets).
And while Philippine politics the
past month has been frenetic, beyond the sound and fury is this
question: Who among the politicians are willing to address the root
crisis of our country and push for the re-nationalization (or forms of
it such as consumer stock ownership or “cooperativization”) of the
electric power industry without which there can be no solution to the
murderously exorbitant power rates (which is also the case in the West
today)?
Looking at the political alternatives, we still see no
clear platform from any of the emerging candidates. That said, the
United Nationalist Alliance, with Estrada’s influence, may still have
more of a maverick potential and could, if empowered in 2013, craft more
populist-oriented policies. Meantime, Trillanes, although on the other
side, is still emphatic in calling for profit caps and for certain heads
to roll. Ditto for an independent like Mitos Magsaysay, who has been
aggressively criticizing the present fuel and power policies.
Besides
nationalization, the other medium-term solution to our energy woes is
tapping the China and West Philippine Sea fossil fuel reserves. But that
will never happen if the Philippines remains in the grip of US-British
clutches as BS Aquino III, Albert del Rosario, and Voltaire Gazmin are.
It’s amusing to read some Filipino opinion writers, like Babes
Romualdez, say, “China pushing RP closer to US,” when we’ve long been
collar and leash in the US’ hands; or Raissa Robles with her “Is China
after RP oil and gas fields?” when it is the US and Britain who really
control these (like in the case of Malampaya).
There should be no
illusion about oil projects today under “Philippine auspices,” such as
the Reed Bank with Forum Energy. These are all Western-controlled in the
same way that certain mining companies are a front act.
All the
conflicts being raised in our shared areas with China are motivated by
the West’s intent to keep China out and garner a monopoly for itself,
with mere crumbs given to Filipinos. So the real solution is to also
nationalize all energy exploration projects henceforth.
(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., on “Tampakan anti-large
scale mining updates;” visit http://newkatipunero.blogspot.com for our
articles plus TV and radio archives)
Source: The Daily Tribune
URL:
http://www.tribuneonline.org/commentary/20120507com5.html
