Happy workers are more productive–DOLE

By Samuel P. Medenilla, Business Mirror, Dec 24, 2018

Studies that will look into the feasibility of raising real wage rates, which have stagnated for over a decade despite the country’s robust economic growth, are now under way according to the Department of Labor and Employment (DOLE).

The DOLE said this is part of the government’s ongoing efforts to improve labor productivity growth rate for all industries by increasing the purchasing power of Filipino workers.

“Happy workers produce more efficiently. If they are unhappy their productivity is low,” Labor Secretary Silvestre H. Bello III said in a previous press conference.

In the last 10 years, the Philippine Statistics Authority’s (PSA) Decent Work Statistics showed labor productivity growth rate remained erratic—dipping to 0.4 percent in 2011 and 2016, then peaking to 8.4 percent last year.

The World Bank and the International Labour Organization (ILO) noted there was zero real wage growth during this period suggesting the country’s economic growth is non-inclusive especially for the “low-paid wage workers.”

The National Wages and Productivity Commission (NWPC) confirmed this trend, which it attributed to the structure of the local industries, which are 90 percent comprised by microenterprises. It said these micro firms tend to have low pays and labor productivity.

Under the Philippine Development Plan (PDP) 2017 to 2022, the administration is targeting an annual growth rate of 3 to 4 percent for the industry sector, and 4 to 5 percent for the services sector.

Earlier this month, the DOLE’s NWPC submitted to the National Economic and Development Authority (Neda) its proposed reforms to hike wage rates.

“If we are targeting a 2-percent increase in labor productivity [for all industries] under the PDP, then there must be a corresponding target for increases in average wage in the economy,” NWPC Executive Director Maria Criselda R. Sy told the Business-Mirror in an interview.

One of the commission’s major proposals, Sy said, is to strengthen the collective bargaining power of workers.

She said the NWPC has also recommended regular increases in the salary of government workers.

“The government is the largest employer. So possibly if you do that, the wages in the government will create a competitive environment for the private sector,” she said.

Sy said the commission also supports initiatives to review the current minimum-wage system under Republic 6727, or the Wage Rationalization Act.

“Secretary [Bello] instructed the commission to come up with the study…so we are going to have a third-party study the minimum- wage determination experience of the NWPC,” Sy said.

“Essentially this will determine the effectiveness of the current system and what are the options that can be explored,” she added.

Labor groups have been pushing for the abolition of the NWPC and its regional wage boards, saying the commission failed to implement a “significant wage hike” since its creation in 1989.

Sy said they are still waiting for the Neda’s feedback on the commission’s recommendations.