Multiple fallacies about the Philippine minimum wages

The debate on whether or not to increase the current minimum wages begs the question on the fundamental philosophy of wages and benefits in this country. The government and its allies continue to commit the fallacies of "argumentum ad absurdum", non sequitur, and "ad populum". This government should declare its policies on wages and benefits, if any, and disclose to the people the philosophy upon which such policies are based. The people are poor but they are not stupid. They know that politicians and bureaucrats are playing games with them.

You can talk sense with the masses if only the government levels up with the people they are sworn to serve. First fallacy: That if you increase wages, it will drive away investors. Wrong. If you are honest enough to accept the facts, you will admit that investors are not coming to our country because of the government. The government keeps on changing policies, keeps on revisiting the tax systems, keeps on regulations, and each time a new administration enters, the entire philosophy of governance and public administration is overhauled. Wages are the least of the investors' worries. In fact, the BPO industry is flourishing because of low wages. The Philippines is known worldwide as a labor-excess and low-wage economy. That is why 5,000 workers are leaving the Philippines every single day to work abroad.

Second fallacy: That if you raise wages, it will kill the small-scale and medium-scale industries, which constitute more than 90% of the total employer sector. This is wrong again. First of all, there has been no scientific study conducted by an independent and reputable institution establishing as facts the long and hackneyed claims of some employers that high wages can kill the business viability of many enterprises. What actually causes the "killing" is the wrong wage systems in this country. We are too fixated with daily wages, monthly salaries, or hourly wages. The government should shift to productivity-based wage systems. That can be done and should be immediately done. As of today, the National Wage and Productivity Commission is 100% wages and 0% productivity.

The third fallacy is that the minimum wage is equal to the living wage. That is pure baloney. The Philippine Constitution, from 1987 to present, has promised and is promising the Filipino workers what is generally called a living wage. What the wage boards are giving is minimum wage. There is a whale of a difference between the two. Living wage refers to that amount of money that a marginal worker needs to sustain a decent and humane life for a family of four, the spouses and two children. Even if we take the highest regional wage which is P570 for the National Capital Region, that amount is only one half of the proper living wage to support a decent and humane lifestyle anywhere in the Philippines.

Fourth fallacy is that wages should be regionalized, and outlying areas and hinterlands should have lower minimum wage compared to Metro Manila and other highly-urbanized cities. The fallacious thinking is that the prices of rice and other prime commodities are lower in the hinterlands. This is the most blatant lie. The people in the remotest mountains of Sultan Kudarat or in Dinagat Islands are eating the same rice imported from Thailand and Vietnam among others. And the prices of rice are much higher in the provinces because of multiple transport costs. RA 6727 has regionalized wages supposedly to entice companies to put up their factories in the provinces. This is wrong. Companies have not responded since 1989 when the law took effect, because of questionable peace and order problems, higher cost of electricity, and alleged corruption in the LGUs. Thus workers are coming to the cities while factories are enticed to go to the provinces.

For lack of space and time, I cannot discuss all the other fallacies here and now. But I am inviting all who are interested to a friendly discussion on these fallacies, or even a debate in any forum and any media in order to ventilate all arguments for and against the issue of raising wages in this country. I am interested to hear from DOLE, from trade unions and employers associations. This is a matter of transcendental importance because it affects all workers, and all employers and, indirectly, all 110 million Filipinos.