Workers no better off

THE Aquino administration likes to brag that the business environment has improved remarkably since it took over almost six years ago. That may be true but the plight of workers has not.

A lot of Filipinos are still worried about the same things as before: jobs and food on their tables. And the government still has the same problem: how to make the country’s relatively good economy matter to most people who are barely eking out a living or are downright desperate.

Certainly, the so-called trickle-down effect has not made a dent on high income inequality and ever increasing poverty.

The money circulating in the economy flows only among the political and economic elite, or lines the pocket of corrupt officials in government and their equally corrupt business cohorts.

Unemployment rates have been stagnant between 2010 (7.0 percent), and 2015 (6.5 percent). The economy is not growing fast enough to reduce the numbers of unemployed (2.8 million in 2010, 2.7 million in 2015).

In the same period, underemployment rates were 22.8% in 2010 and 21% in 2015. Their numbers, however, remained almost frozen (6.8 million underemployed in 2010, 6.5 million in January 2015).

One has to wonder about the real growth rates in the Philippine economy.

Wages have not really increased in real terms. In contrast, real productivity has grown 17% between 2010 and 2014.

Stagnant wages constitute a big barrier to sustainable growth, since labor households have not raised real consumption spending.

This administration has declined to adjust antiquated income tax rates. In addition, VAT continues the regressive nature of Philippine taxes. Rich and poor households alike pay the same VAT rates for commodities they buy.

Our manufacturing base has been contracting and we are still very much a remittance dependent country.

Eighty percent (80%) of Philippine manufactured exports come from PEZA. But there are only 1.2 million workers in PEZA incentive-administered economic zones.

Sure, productivity and skills in ecozones compare with the best in the world. First manufacturing of a number of new products are done in ecozones.

Foxconn, the world’s largest electronics contractor manufacturer, and the third-largest information technology company by revenue, is already here, although in a limited way.

Philippine BPOs are moving upmarket—back office operations, including accounting and HR, health checks, investment tracking and advice, rather than just selling and servicing.

But our country’s strengths in literacy, labor cost and location have been trumped by non-competitive incentives, infrastructure and policy instability.

A number of manufacturing expansions have been stymied by port congestion.

The administration’s apparent laziness and incompetence has worsened poverty, hunger and social injustice.

The poor in 2015 (2nd quarter) made up 51 percent of the population, the hungry18.1 percent. In the same quarter in 2010 the poor only made up 50 percent . The hungry made up also 18.1 percent (November 2010).

Obviously, with all the billions supposedly spent on the conditional cash transfer and other poverty reduction measures, poverty and hunger rates remain painfully the same.

The Philippines remains to be one of the countries’ whose wage rates fare poorly compared with those of our Asian neighbors, whose workers are paid better, taxed much less and get more services from the government.

The country’s minimum wage is among the lowest in the region at P481 (private, non-agricultural) while in other private sectors, at P429. This would not even be enough after basic expenses for a working family man to treat his wife and kids to the occasional fastfood meal or movie.

Overtaxed workers can hardly cope with increasing prices of commodities and rising tuition and other fees for their children.

Contractualization is also rampant and unchecked.

Filipinos continue to leave the country in droves is to seek greener pastures.

The number of OFWs deployed was at 1,470,826 in 2010; as of 2014 1,832,668.

Data released by the Philippine Statistics Authority (PSA) showed six out of 10 members of the labor force are looking for better employment opportunities.

Real economic growth must benefit the people. Ultimately, a country should gauge its economic performance on the ability to provide its citizens with what they need to live a decent life: enough food, adequate shelter and health services, a well-paying job, leisure and family time and a good education.

Now, as the Aquino administration prepares its merry exit, it may be worthwhile to look at how little it has achieved for the ordinary working Filipino.

The President and his minions may be happy with their accomplishments but most workers would not. Why should they? They are no better off.

“Ernesto Herrera”
ernestoboyherrera@yahoo.com