GRACEY CORIAGE

Minimum wage rate – refers to the lowest basic wage rates that an employer can pay his workers, as fixed by the board, which shall not be lower than the applicable statutory minimum wage rates. (Article 121 (C) of the labor code amended by R.A. 6727)

Labor cost – represents all costs incurred by the employer in the employment of labor. Specifically, it covers “remuneration for work performed, payments in respect of time paid for but not worked, bonuses and gratuities, the costs of food, drink and other payments in kind, cost of workers’ housing borne by employers, employer’s social security expenditures, cost to the employer for vocational training, welfare services and miscellaneous items such as transport of workers, work clothes and recruitment, together with taxes. BLES (Labstat vol. 8 No. 15 October 2004)

We may determine wage fixing Under the Article 121 (C) of the Labor Code as amended by R.A. 6727 under Rule II section 2 states some standards and criteria for Minimum Wage fixing which is being characterized into four major groups:

Needs of workers and their families

1. Demand for Living wages
2. Wage adjustment vis-a –vis the consumer price index
3. Cost of Living and changes therein
4. Needs of workers and their Families
5. Improvements in standards of living

Comparable Wages

1. Prevailing wage levels

Capacity to pay of employers/Industry

1. Fair return on capital invested and capacity to pay employers
2. Productivity

Requirements for national development

1. Effects on employment generation and family income
2. Equitable distribution of income and wealth along the imperatives of economic and social development
3. Need to induce industries to invest in the countryside

The increase in Minimum Wage has been a battle cry for all Filipino people in the employment sector. This has long been a dilemma for people in the government to fix the wage system of the Philippines. The minimum wage set by the government given by employers both in some private and public sector cannot suffice the daily cost of living for the family of 6 or more of a minimum wage earner of the society. It also affected those who assumed the position of being the “bread winner”. Defining Living wage which refers to the amount of family income needed to provide for the family’s food and non – expenditures with sufficient allowance for the savings/investments for the social security so as to enable the family to live and maintain a decent standard of human existence beyond mere subsistence level, taking into account all of the family’s physiological and other needs. Given both terminologies – Does this coincide to a more ideal “living wage” a family should have?

We may correlate the meaning of “Living wages” to that of Maslow’s hierarchy of needs where in it must be attained first and satisfied before continuing to the next. Level one of this need is the physiological needs which are the following: food, clothing and shelter. To be able to sustain this need you must be in a level or capacity to do so. How will these needs be met by a minimum wage earner if we based it on the statistics sited as of June 2006 a person residing in metro manila (NCR) is earning P350 as his minimum wage which on a daily basis a family living wage should be P780. We may observe based on the given facts that there is difference of P430. The increase in minimum wage of P350 (P300 as basic salary + P50 for COLA) too many was “salvation” for people who is receiving minimum wage. On the contrary based on the given facts is still insufficient for decent livings were some families out there who don’t even have three meals a day. It cannot even sent an ailing member of the family to private hospital with a first class in technology because of that they will settle for public hospital or clinic that at times scarce in hospital equipment.

Wage fixing is a very rigorous process to do because it will entail the participation of the government and employment sector both in private and public. In accordance to these changes it results to strikes held nationwide if these said changes are not applicable to the labor sector. The outcome of course must be favorable to both parties as well. The best way of wage fixing that we can use as a tool in changing our set of implemented rules and regulations are as follows:

1. It lies on how the government determines what their people needs. The guidelines were being implemented by RTWPB. They implemented guidelines that dictate economic impact it will do to the country but never did they equate the purchasing power of each individual.

2. If RTWPB implemented criteria for wage fixing the government should find ways to regulate the increase of prices that the world market dictates of things that the country is dependent on. This way the minimum wage will still be applicable for many parts of the archipelago.

3. Fixing wages should not be based on the employers’ capacity to pay but on the capacity of the worker to provide for himself and his family the basic necessities at the very least.

4. The government may try to look in adapting the Keynesian analysis in determining the supply and demand curve of the Philippine Setting.

Resources:

1. http://www.accel-team.com/human_relations/hrels_02_maslow.html
2. http://www.bulatlat.com/news/6-22/6-22-wages.htm
3. http://www.dole.gov.ph/faq/details.asp?id=F0000192

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