One of the arguments raised by employers against a wage increase is that it will increase unemployment and even reduce growth. Research group IBON belies this claim, saying that wages are not a substantial factor affecting the country’s employment. For instance according to IBON, the largest real minimum wage increase under any administration since 1986 was during that of former president Corazon Aquino with real wages Php73 higher at the end of her term compared to the start. This was more than under Estrada (Php23 increase), Arroyo (Php9) and Ramos (Php6). Yet the Corazon Aquino administration saw the second highest growth in the post-Marcos era – at 3.9% average annual growth in gross domestic product (GDP) which was second only to the Arroyo administration (4.5%) and higher than under Ramos (3.8%) and Estrada (2.4%). In contrast the Arroyo administration had the second lowest real wage increase but by far the worst unemployment – at 11.2% average annual unemployment compared to the Estrada (10.4%), Aquino (10.1%) and Ramos (9.3%) administrations. Another argument by employers is that a wage increase is unjustified by the degree of worker productivity. But there is reason to believe that this is not the case in NCR where growth in labor productivity has far outpaced the mandated minimum wage. A measure of NCR labor productivity is in terms of NCR regional gross domestic product (RGDP) per employed person. This increased by 97% from Php342,832 per worker in 2001 to Php675,907 in 2009. Yet the minimum wage only rose by a much lower 44% over that same period, from Php265 at yearend 2001 to Php382 at yearend 2009. NCR RGDP was Php1,302 billion with 3.80 million employed persons in 2001 increasing, respectively, to Php2,814 billion and 4.16 million employed persons in 2009. This uses RGDP data from the National Accounts of the Philippines of the National Statistical Coordination Board (NSCB) and employment data from the Labor Force Survey (LFS) of the NSO. There are many factors affecting growth and employment and wages are not the most substantial among them, said IBON. Taking the economy as a whole, government’s excessive liberalization thrust, for example, is a bigger factor repressing economic growth and job creation. (end) IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.
