The Nagkaisa Labor Coalition refutes strongly preposterous and misleading argument put forth by certain business groups that only a minority will benefit from the proposed legislative wage increase and as a result, raising wages will send 50 million workers begging for ayuda. The business groups recently claimed that increasing wages would only benefit a small percentage of the total workforce, stating that approximately 16 percent or about eight million workers in the formal sector out of the total 50 million Filipino workers would be eligible for the wage hike.
This line of argument tries to draw a trade-off between workers in the formal and informal sector to diffuse employers’ direct accountability to their workers, hoping that by painting this ‘little-to-no effect’ and hyperinflation scenario, lawmakers would reconsider passing a legislated wage measure.
We contend that the miserable state of the 50 million workers or more, which is a bigger agenda than a wage hike, is not for the workers to solve but for the government and the capitalist class which failed to address problems of chronic poverty and inequality in the country for decades.
And certainly, keeping minimum wages at starvation level perpetuates the problem, thus, telling minimum wage workers to sacrifice further on behalf of their poorer brothers and sisters in the working class does not solve anything except the comfort of businesses to keep their profit margins when wages are kept at bare minimum.
The business’ arguments fail to consider the broader economic effects and undermines the crucial role of fair wages in driving sustainable growth. Contrary to their claims, raising wages will have a significant positive impact on the economy and the majority of Filipino workers.
It is vital to recognize that the well-being of workers and economic growth are interconnected. By ensuring fair wages for a significant portion of the workforce, we can create a positive ripple effect that stimulates economic activity, increases consumer spending power, and fosters social progress. The 16 percent of workers who will experience increased wages will contribute to a healthier economic climate, benefiting businesses and workers alike.
In addition, the economic benefits of wage increase can help address the persistent issue of malnutrition in the Philippines. UNICEF data reveals the severity of malnutrition in the country, with devastating consequences for the future of Filipino children. Every day, 95 children die from malnutrition, and twenty-seven out of 1,000 Filipino children do not get past their fifth birthday. Shockingly, one-third of Filipino children are stunted, meaning they are short for their age. Stunting after the age of 2 can have permanent, irreversible, and even fatal effects. Needless to say, that malnutrition is the culprit behind the country’s dismal below-average IQ ranking of the Philippines in the World Population Review 2023 (WPR).
These distressing statistics underscore the urgent need for action. A significant wage increase plays a crucial role in combatting malnutrition by enabling families to afford nutritious food, access healthcare, and provide a better quality of life for their children. By addressing the root causes of malnutrition through improved wages, we can protect the future generation of Filipinos from the devastating effects of undernutrition.
We maintain that the first key advantage of higher wages is that workers have more money at their disposal. With increased purchasing power, workers are empowered to spend on essential goods and services, thereby driving consumer demand. This heightened consumer spending not only benefits businesses directly but also stimulate overall economic activity, contributing to a positive economic cycle.
Secondly, higher wages can foster employee loyalty and motivation. When workers are fairly compensated for their efforts, they feel valued and are more likely to be engaged and productive in their roles. This improved productivity can enhance business efficiency and output, further bolstering economic growth.
Likewise, a workforce with higher wages projects stability and helps attract investments. Investors are drawn to countries or regions where workers have decent wages, as it signifies a stable and growing consumer base. Such countries are viewed as favorable investment destinations due to the potential for increased sales and profitability. By implementing higher wages, nations can position themselves as attractive markets for both domestic and foreign investment, spurring economic development and job creation.
Therefore, it is crucial for policymakers and businesses to recognize that investing in workers through higher wages yields significant long-term benefits. The positive effects cascade throughout the economy, generating a multiplier effect that contributes to overall prosperity.
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