NCR wage increase has zero impact on the economy

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The ₱35 extra wage awarded by the National Capital Region wage board to workers last week is worthless. The National Economic and Development Authority (NEDA) itself admitted that it has no effect on the local economy. It said it only affects 1/10 of 1% of the country’s GDP (gross domestic product).

“We do agree that the NCR wage hike will not impact on economic growth because the amount given is negligible at just 0.9% of Metro Manila establishments’ profits and because the wage hike is barely adding to the purchasing power of worker families,” Jose Enrique “Sonny” A. Africa, executive director of think tank IBON Foundation, said. “Greater aggregate demand from wage hikes driving greater consumption spending is a more sustainable and reliable incentive for investments than a cheap labor regime,” he said.

Only six regions have announced wage increases this year, and the last wage orders in 11 months will be issued at the end of 2023. This means that maybe at the end of this year, wages will increase slightly in many parts of the country, Africa said.

Meanwhile, NEDA is still parroting the threat of mass worker layoffs when wages are raised, and that job losses are possible even with a ₱35 wage increase. Amid claims of unemployment due to the meager wage increase, the country’s unemployment rate has actually been in decline for four months despite having no wage increases. In the previous four months, unemployment was highest in May (4.1%), after the labor force grew.

NEDA’s boast that “quality” jobs have increased is empty, after the underemployment rate dropped from 11.7% in May 2023 to 9.9% this year.

In fact, the largest number of jobs created in May was in the construction sector, which are not only contractual, but also one of the lowest paying with minimum daily wages at ₱540/day.

Real wages are far lower due to unbridled inflation. In NCR, real wages are at ₱503.51 with nominal wages at ₱610/day. One of the widest gaps between the nominal and real wages is in Central Luzon where the nominal ₱500/day has a real value of only ₱385. BARRM registered the lowest value, where nominal and real wages are at ₱361/day and ₱285.05, respectively.

Amid all these, workers continue to call for a living wage of ₱1,200/day. This afternoon, workers under the Kilusang Mayo Uno trooped to the DOLE office to assert that the P35 increase for Filipino workers is an insult.

“We have endured the wage system of the Wage Rationalization Act for 35 years,” the group said. “Since then, until now, workers have had nothing else to hope for in this policy but hunger and lower wages.” They called for the dissolution of the wage board and the resignation of the pro-capitalist DOLE secretary.

Even before workers started on their program, police confronted them to force them to disperse. They asserted their rights and continued with their program.

AB: NCR wage increase has zero impact on the economy