EDITORIAL - Cash dole takes away need for pay hikes

A recent report by the Asian Development Bank says real wages in the Philippines have stagnated over the last 20 years. It said this is mainly due to the fact that high unemployment forces jobseekers to scramble and fight for the limited available jobs. In other words job security takes precedence over just compensation, a situation that opens up the labor sector ripe for exploitation.

In a country that is both corrupt and overly politicized, the recipe is simply perfect for such exploitation to be perpetuated, regardless of what successive administrations may have promised to undertake at the beginning of their terms. In the end, tradeoffs eventually take their toll as politics become the main interest of every leadership.

And that is why, even right at this very moment, nobody except the labor sector seems to appreciate the need for real wage adjustments. There is no dearth of excuses to either reject or postpone such excuses. And the worst thing about it is that, despite the realistic social pressures to adjust wages, the excuses always prevail in the end.

Democracy, after all, dictates consensus, a tool that, improperly wielded, results in a tyranny of numbers. In wage boards all over the country, the numbers are always stacked against the labor sector. There may be even representation between labor and business, but government makes for the winning margins. And God knows where government’s favor always swings.

In fact, the government votes in these wage boards are not the only obstacles labor must have to contend with. Even government policies tend to always take the butter away from the bread of labor. But no government in recent memory has taken disincentives for realistic wage adjustments to the farthest realms of impossibility than this one.

No one has tried to see this in this light, but the cash doleouts implemented by this government, euphemistically called conditional cash transfers, amount to the biggest disincentive of all for realistic wage adjustments and economic benefits. With billions upon billions of pesos incredibly earmarked for distribution to the poor, what compelling reason is there left to adjust wages.

Through the cash doleouts, the government has given the clearest signal yet that it does not really matter if business refuses to adjust wages. After all, the government of the people is there with its mountains of cash to feed the hungry and clothe the naked. No businessman worth his salt can miss this signal and fool is he who does not act accordingly.