That a wage hike is not possible and untimely because it will increase the cost of production in the country and will cause businesses to go bankrupt, to close shop, be forced to retrench employees, and that a wage hike will cause runaway inflation that will further increase the prices of commodities are big worn-out lies peddled time and time again by big businessmen, greedy investors and capitalists to reject any justified demand for an increase in wages and salaries. They are nothing but mere imagined threats and boogeymen.

The matter is quite simple for millions of ordinary wage earners. The minimum wage (P404 at the National Capital Region/NCR, much lower in other regions) is a wage that is far from enough to meet the basic demands of the family (average cost of living for a family of six in NCR is almost P1,000 a day), not even when both parents are working. It is a wage of starvation.

But since dogmatic neoliberal economists and the present government insist on harping bankrupt economic doctrines to frustrate any demand for wage hike, let us indulge in them in some rebuttals and statistics:

(1) Businesses in the Philippines can afford a P125 wage hike without going bankrupt nor having to resort to lay-offs or shutdowns

You only have to read the business section of newspapers to see how profitable big businesses in the Philippines have become the past years, earning record billions of pesos year after year. You only have to read the papers to realize how the government harps on economic growth and progress every quarter (Government even claimed that the economy grew by more than 7% last year). If such is the case, why are the masses getting poorer and hungrier (read: Hunger incidence up – SWS)? Where is the wealth going? Your guess is as good as mine.

Here are some facts from research group IBON:

IBON noted that the economy actually has more than enough profits to support workers’ call for a Php125 wage increase. Government data show that establishments in the country with total employment of 20 and over had combined profits of Php895.2 billion and 2.74 million employees, according to the preliminary results of the 2008 Annual Survey of Philippine Business and Industry (ASPBI) of the National Statistics Office (NSO). (from: IBON: Wage increase justifiable, possible)

Here are another set of facts from former Presidential economic adviser Joey Salceda:

[The Philippines' top 1,000 corporations'] total earnings amounted to P3.1 trillion of which P2.1 trillion were pocketed as dividends or earnings of the stockholders and only P1 trillion were re-invested (from: Economic growth in 9 years did not touch poor)

Economic growth is not immediately felt because the proceeds are held by corporations, [Salceda] said… “Whew! They never had it so good. All the while I thought the primal reason for business is to provide for the nation” (from: Salceda cites GMA term as most pro-business)

Companies are, indeed, far from being bankrupt. It is their excuses which are bankrupt!

(2) Companies only have to yield a cut in their profits to avoid the imagined threat of runaway or spiraling inflation

Granting an across the board wage hike of Php125 means workers will receive an additional PhP3,802 per month, and that employers will spend an additional Php49,427 per employee per year (assuming 13 months of pay). The total cost of the proposed wage hike will only be Php135.6 billion which, subtracted from total profits, will still leave establishments with Php759.6 billion in profits. This is only a 15.1% cut in their profits. (from: IBON: Wage increase justifiable, possible)

All businesses have to do is to accept a meager 15% cut in profits to prevent inflation. Inflation will only be caused if capitalists pass on to consumers the wage hike and the cut in their profits. There is no need for them to increase the prices of their products or services if they simply yield. (It’s not as if they will go hungry. Probably one less overseas vacation for their families, but it definitely won’t hurt them.)

This is essentially giving back to the workers the wealth that they create. No Corporate Social Responsibility (CSR) gimmick can beat the just and equitable distribution of the wealth. Workers are not even asking for the dismantling of the capitalist exploitation inherent in the privatization of the collective mode of production. The immediate demand is simply a P125 across the board nationwide minimum wage hike which will provide economic relief to millions of families and which employers can very well afford.

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