Increase minimum wage to narrow cost of living gap, Ibon urges government

THE local research group Ibon Foundation Inc. has urged the government to implement a significant minimum-wage increase, as this would bridge the widening gap between the minimum wage and cost of living.

“A large wage hike, such as the P125-increase petitioned by labor groups, may not bring a decent standard of living to poor families but this will substantially improve their welfare. Raising wages is a concrete way to make growth in the country become more inclusive, with low-paid workers sharing in the fruits of economic growth rather than benefiting just a handful of rich families and big corporations,” the group said.

The gap between the mandated minimum wage and family living wage (FLW) in the National Capital Region has widened in the past 10 years, Ibon said.

By the end of 2011, Ibon said, the gap between the minimum wage and FLW rose to P567. The group said that the minimum wage of P426 per day was only 43 percent of the FLW that was at P993 per day.

This was significantly higher than the end of 2001, when the gap between the minimum wage and the FLW was at P244. The group said that at the time, the minimum wage of P265 per day was 52 percent of the FLW, which was at P509 per day.

“The family living for 2011 is inflated using NCR commodity price index since September 2008—the last time that the National Wages Productivity Commission released an FLW estimate,” Ibon said.

Ibon also said the current NCR minimum wage of P426 is also “grossly insufficient” to meet the needs of a small Filipino family. The bulk of the wage, which is about P204 per day, Ibon said, is allocated for food needs alone.

Ibon said that P2,096 per month is spent for rent; P1,150/month for fuel, light and water; and P28/day or P843 per month is allocated for transportation.

Together, Ibon said, these account for some 80 percent of total spending with the balance going to personal care, clothing and footwear, education, medical care and others.

“This indicates the poor quality of life that minimum-wage earners in Metro Manila can afford.” Ibon added that this contrasts with, for example, the amount spent by the richest 10 percent of families in NCR that average P18,041 per month just on food.

Earlier, even if many Filipino workers complain about their salaries and wages not being high enough, data compiled by the National Statistical Coordination Board (NSCB) showed that the minimum wage in the Philippines is already one of the highest in the region, based on the amount of kilos of rice it can purchase.

The NSCB’s newly released “Sexy Statistics” showed that the minimum wage in the Philippines and Thailand can buy the most rice compared to minimum wage in other Asean members in 2010.

The country’s minimum wage of P270.98 or $6.16 per day can buy around 7.9 kilos of rice; in Thailand, the minimum wage of $4.84 per day can buy as much as 10.3 kilos of rice. The NSCB used the Food and Agriculture Organization’s (FAO) estimate that each kilo of rice was valued at $0.78 or around P34.34 per kilo in 2010.

Data also showed that when the minimum wage in Metro Manila is used, the Philippines replaces Thailand in the top spot. The minimum wage in the National Capital Region (NCR) at P404 or $8.34 per day can buy as much as 10.69 kilos of rice.

The NSCB said that these data could also be used as an argument against increasing minimum wage. The agency said this is the purpose of the NSCB in releasing these kinds of statistics, to help contribute to government policy-making and planning. –Cai U. Ordinario / Reporter, Businessmirror