Safety nets for minimum wage earners

In last Saturday’s column, we promised to follow up on the issue of minimum wage with an article on non-wage safety nets. For we can say without fear of serious contradiction, that there is a need to raise the income of the family, without unnecessarily raising the cost of operations and production, if we are to save the poorest of the poor from the damaging effects of a run-away cost of living and the substantial erosion of the workers’ purchasing power. The need to help the workers is beyond debate, given the high cost of food, shelter, medicines, education and other basic needs.

Helping the workers by raising minimum wages, to our mind, would not be the best solution. Too high labor cost may be beyond the capability of small and medium-scale enterprises. It may indeed be inflationary and may even exacerbate the problem of unemployment. In the long run, raising wages may even turn out to be anti-labor. Food manufacturers and other producers of prime commodities may use it as a justification to raise the prices of goods, to the great prejudice of the working class who are also themselves the main bulk of the consumers. Legislating a P125 across-the-board increase may be a good political gambit, given that 2013 is an election year, but it may kill the “goose that lays the golden eggs.”

Thus, we are proposing a package of non-wage safety nets that the government and the private sector, as well as the trade unions and civil society may wish to consider. The wage issue is so critical that it should not be left to the hands of government alone. The relationship between labor and capital, according to our Civil Code, is not merely contractual. It is impressed with public interest that matters about wages and labor relations should become the concern of the whole nation. If the workers’ economic and financial difficulties are left alone to the law of supply and demand, even the social equilibrium would be put in jeopardy, and social unrest may pose a grave and imminent danger to national security.

First among our proposals is to help the workers’ families augment their income without raising wages. Instead of dole-outs, government financial institutions may open more windows for capital to empower the families of workers to venture into micro and small enterprises. This should be supported with technical training on entrepreneurship and small business management, as well as technical assistance on food production, marketing, and logistics. Wives and children should be organized into small business and production units that shall generate income for the family. The Land Bank, the DBP, the SSS and GSIS, instead of lending money to multi-millionaire real estate developers, should channel capital to the families of the poor.

There are a thousand and one micro and small business ventures, ranging from goat-raising, small poultry, and piggery business in the rural areas, and small laundry shops, tailoring, dressmaking, barber shops, food processing and vending. Instead of giving fish to people, government would go a long way by teaching people how to fish. We need to trust our working class. Empirical data in the banking industry do indicate that the poor borrowers have much better records of paying loans than the millionaires, among whom many have absconded and laundered loaned money to foreign shores that are beyond our courts to recover. 

The government can also help the poor workers by providing free or low-cost transport systems to and from their working places. Congressmen should allocate at least half of their pork barrel to scholarships of all high school class valedictorians, salutatorians, and top 10 students in classes. This would be a tremendous help to our poor and should prove to be a worthwhile investment in our human capital. The other half should be used to lower medicare cost for the less privileged. The employers can help by providing housing for all their workers payable by salary deductions, as well as rice at affordable price. The businessmen can buy in bulk so that, by economy of scale, they can source this prime commodity at very affordable cost.

The civil society, including the Church, the NGOs, the POs like the Rotary, the Jaycees, the Lions and the Inner Wheel Clubs, should come together and join hands to build more homes for the working class, in the style of Habitat for Humanity and Gawad Kalinga. The Church should stop pontificating and telling government how not to manage population. How can they save the souls, if the bodies where the soul resides are dying of hunger, disease and malnutrition? Faith without action is dead. The task of helping the poor is everybody’s concern. We are all our brothers’ keepers. Words are cheap and everyone wants to show off. What we need is action. Now.