Living wage: A social obligation

BREAKTHROUGH - Elfren S. Cruz - The Philippine Star

The term living wage refers to the income level that allows individuals or families to afford adequate shelter, food, health care, education and other necessities. The goal of a living wage is to allow workers to earn enough income for a satisfactory standard of living and prevent them from falling into poverty. The minimum income that a family of five in Metro Manila needs to live through each day is a wage of P1,160 or P25,226 a month to live decently.

In the current debate on whether the minimum wage should be increased and by how much, there is hardly any mention of the obligation of society to ensure that each family should earn enough to afford the minimum necessities of life. It would also be interesting to find out what would be the daily wage of the people who are the most opposed to any increase in the minimum wage. I would not be surprised if the people strongly objecting to any minimum wage increase is earning more than a hundred times the present minimum wage of P610 in Metro Manila.

The proposed increases in the minimum wage will still result in a minimum wage way below the required amount for a family to live decently.

The reasons for the objection to an increase in minimum wage are expressed in terms of inflation and investments and other economic terms. It would seem that if we believe these arguments, the main tool for economic growth and controlling inflation is by keeping the minimum wage at a poverty level.

Surely our business leaders and traditional economists can find other ways of making the Philippine economy grow and controlling inflation. I strongly believe that this nation cannot continue to rely on keeping its workers live at poverty level in order to attain economic growth.

I have a feeling that if I suggest that companies either sacrifice profitability or that the government subsidize micro enterprises, I would be labelled a socialist. Perhaps the business sector should also increase investments needed to increase productivity rather than keeping wages low.

In other countries, governments also went into massive spending that would increase employment. The key to the economic miracle of China was massive investments in infrastructure spending, which also resulted in wide-scale increase in employment.

Those who are publicly opposing any increase in minimum wage should shift their attention to the real obstacles to economic growth in this country. I am referring to corruption, an incompetent bureaucracy, massive income inequality and crony capitalism.

The sad thing is that the issues of a minimum wage and a living wage have become purely economic issues. This is the reason that the argument against this increase is in terms related to inflation, economic growth and investments.

There are equally important aspects that should be considered. The first is the obligation of society to ensure that every family can afford the bare necessities. This has been expressed even by Pope Francis in his encyclicals.

The other facets in this debate should also include areas like the spiritual and even the political.

There is a reason why there has been a rise of rightist populists in the world. The worsening income inequality has made people who are perceived to be against the ruling elite as better alternatives as leaders. That is the reason for the rise of popularity of people like Trump in the United States, Duterte in the Philippines and Orbán in Hungary.

A few columns ago, I wrote about John Rapley and his book “Twilight of the Money Gods.” The basic theme of the book is the reason why economics has become almost like a religion to many people, especially decision-makers. The book also talks about how it all went wrong for this social discipline.

Economics has become a doctrine with even a moral code promising adherence to worldly salvation. It has also become an ideology that promises the faithful believers that they can remake entire societies. It provides instructions even on deeply human matters like the meaning of life and the purpose of human existence. It expresses all these in a language that oftentimes can be understood only by this new caste of economic priests.

It should not be surprising that one of the principal bases for economic growth and controlling inflation is to keep the ordinary family from earning a decent wage. The lower class is, after all, the more vulnerable citizens in society with hardly any voice in decision-making. This is an easier sector that can be forced to pay the price rather than the rich who, though few in numbers, have more power and influence.

The loss of voice among this oppressed sector has become worse because of the decline of the traditional left. We should stop treating economics as a religion and remember that an overriding obligation of a nation is to ensure that its citizens can, at the very least, afford the basic necessities of life.

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