NGO reiterates call to abolish wage boards
The recently approved P22 increase in the cost of living allowance (COLA) for Metro Manila workers will be totally eroded within only four months, a labor NGO said today as it reiterated to Congress the urgency of abolishing regional wage boards.
Based on Ecumenical Institute for Labor Education and Research (EILER)’s computation, the new P426 minimum wage with integrated COLA in the National Capital Region (NCR) is only worth P248 in real terms using the April 2011 inflation. Assuming that the current rate of price hikes will continue throughout the year, the P248 real wage in NCR will shrink to only P235 by September – the same real value of minimum wage last month.
[For the table and computation, please refer to the notes below]
“The recent P22 increase in COLA will only be eaten up by nonstop price hikes in the coming days and weeks and thus will be hardly felt by Metro Manila workers. What it creates is an illusion of increase when in fact there is only stagnation of workers’ wages,” said EILER executive director Anna Leah Escresa.
“Moreover, the trick with the measly COLA increase is that it will not actually affect the overtime and night-shift differential pay as well as benefits of workers since it does not increase the basic daily wage,” she added.
EILER also noted that the real value of P426 which is P248 is almost the same as the value of NCR minimum wage in 1989, the year when the regional wage boards were created under Republic Act 6727 or the Wage Rationalization Act.
“There is practically no change at all in the real value of workers’ wages under the regional wage boards since the wage hikes being granted under the system are only spare change. That is why Congress should mull abolishing this failed mechanism of fixing wages,” said Escresa.
Escresa reiterated that Congress is in the best position to arrest the declining value of wages by approving a legislated wage increase in the form of House Bill 375 filed by Anakpawis Party-list.
HB 375 calls for a P125 nationwide across-the-board wage increase for all private sector workers.
> Data on Consumer Price Index (CPI) in NCR is obtained from the National Statistics Office (NSO) website
> Purchasing power of the peso is derived by using the following formula:
Purchasing power of the peso = (1 / CPI ) x 100For a detailed explanation of the formula, see the NSCB’s technical note.
> Real wage is computed by multiplying the purchasing power of the peso with the nominal wage.NCR’s minimum wage increased to P426 from P404 in May due to the recent COLA increase which will be integrated in the basic pay
> The highlighted rows (April and Sept) indicate the similarity of the real value of the minimum wage in NCR.