DTI-7 director says: Imbalanced labor supply, demand root of low pay

TAGBILARAN CITY , Philippines  — An "imbalance of labor supply and demand" in our economy would likely be the root cause of low salaries of domestic workers, according to Trade and Industry-Region 7 director Aster Caberte.

Caberte, who is also vice-chairperson of the Regional Wage Board, said this is "economics of the labor market. That's a picture of how imbalanced atong equation sa labor supply ug demand."

The situation of very low salary and wages to workers of business establishments has been the same for so long now, she said adding that the practice of these businesses "not complying with the minimum wage" largely depend on the supply and demand for labor.

Productivity level of workers is also low, and businesses have more employees than customers, Caberte said.

In Bohol, there are more manpower, including fresh graduates from college, than the demand for job opportunities. Some of the workers who cannot find compensated work here resort to going elsewhere and abroad for the proverbial "greener pasture."

Caberte explained that if establishments are forced to abide by the law on wages, they most likely have no choice but to close down because the "equilibrium level" is already imbalanced. 

Some may just end up retrenching or impose belt-tightening measures. "You really have to strike the right level. Compliance is a different thing," said Caberte.

She admitted however that setting the minimum wage requirement is an "unpleasant" job and said it is neither her duty nor of the wage board to go after the violators.

On the concern why the "low wage" provision is not met or being tolerated, Caberte said it is because many will just bear it.

Local workers prefer to have an employment with low wages instead of staying at home without income, she said.