1%

by Alex Magno (The Philippine Star), Aug 6, 2019

Over 40 million Filipinos are employed. Of that number, less than 300,000 are affiliated with a labor union.

That is less than 1% of all employed. This is a good number to remember when considering proposals that will make our labor policy even more rigid made by the trade union aristocracy.

More rigid labor policies will be harmful for the 99% of employed Filipinos determined to eke out a living against the odds. More rigidity will benefit only the 1% and the labor aristocracy living off union dues paid through the nose by union members.

It was not always this way. Trade unions, especially the highly ideological ones like Kilusang Mayo Uno (KMU), once ruled the roost. They had the ability to put pressure on government to push policies that amounted to economic nonsense such as legislated wage setting and a ban on contractual employment. They wanted to force business enterprises to assume all the business risks when hiring workers.

During its heyday, the KMU (the only group outside China to cheer the 1987 Tiananmen massacre) called for “Welgang Bayan” at every slightest excuse. These were politically inspired general strikes intending to assert the power of the CPP and hold government hostage to leftist demands. Needless to say, these strikes brought calamity to factories that lost workdays and failed to meet tight delivery schedules.

Economic reality struck back. Whole factories shut down and moved abroad. Investors looking at setting up manufacturing enterprises in the country diverted to other economies in the region.

Before the KMU brought its calamitous tactics to play, we had one of the most robust garment exporting industries in the world. This sector employed over a million workers. The factories have since moved out to Vietnam and Indonesia and even Bangladesh. Domestic unemployment spiked.

The militant trade unions lost the manufacturing base from which they drew their power. Our economy’s manufacturing base disappeared and unemployment spiked. A whole generation was lost to poverty.

When we could not export things, our economy began to export people. That is another layer of tragedy.

The loss of our manufacturing base because of irresponsible trade unionism is just half of the equation. In the decades since the Edsa Revolution, our agriculture sector also began to fail.

Much of our agriculture sector’s failure is attributable to a badly designed agrarian reform program. This is a program, favored by the Left, that is shaped by social justice goals rather than by hard-nosed economic sense.

By subdividing the land into small and unsustainable “family plots”, the agrarian reform program created rigidities that prevented modernization of our agriculture. The smaller plots did not make mechanization economic. Nor did these small plots enable the subsistence of farming families.

What happened is that farming became a poverty trap. Farms were left untilled, with its “owners” preferring to wait out the prescription period to speculate on land prices.

With land scarce and land policy inflexible, land prices escalated. This made it expensive for ordinary Filipinos to meet their housing needs. The housing gap grew to over three million units over the past three decades.

Instead of increasing domestic rice supply and bringing down prices through mechanization, the agrarian reform program produced less rice at higher prices. From being a major exporter of the grain, the country became a major importer over the last three decades.

The continuing failure of our agriculture explains the large wave of migration from rural communities to urban centers. This created a second generation of problems.

With our manufacturing hallowed out, there was little employment in the cities to absorb the migration. Slums grew. They occupied critical waterways and pushed communities to hazardous shoreline locations. Rising urban misery also fueled a rise in other social problems.

The Philippines’ descent into the Sick Man of Asia is bracketed by inflexible labor policies and by a self-defeating agrarian reform program. Both destructive policies are central to the political orthodoxy of the Left.

At the nick of time, before it lapsed into law, President Duterte acted boldly and vetoed the “Security of Tenure Bill.” That prevented a worse economic disaster from happening: more capital flight, higher unemployment and an even scarcer manufacturing base.

The veto is an act of economic statesmanship on the part of the President.

The Left and their fellow travellers will try and make this bold decision politically costly for President Duterte. But, having killed off their own constituency, the militant unions will have no power to project this lost cause.

At the Senate, Sen. Joel Villanueva refiled the vetoed bill. His father, now Rep. Eddie Villanueva filed the same at the lower chamber.

With the best interests of the nation at heart, we hope the attempt to enact this bankrupt bill will fail.