history of wage setting in rp

8/11/2019 History of Wage Setting in RP

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On the History and Impact of Wage Setting in the Philippines

Ensuring feudal, semi-feudal and semi-colonial exploitation of the Filipino people

characterizes the history of wage setting in the Philippines. Through the first wage law

RA !" enacted in #$%# to the present RA &"& enacted in #$'$, the Philippine (tate hasguaranteed that the Filipino wor)ing people remain ensla*ed to the dri*e of the local

ruling classes and imperialism to increase their profits.

(ince the #$%!+s, the producti*ity of the people has increased annually. owe*er, wages

paid to direct producers a*eraged only ! of the wealth produced from #$%# to #$$'.

The /iggest part of the unpaid *alue produced or a/out ' is spent to finance theparasitic lifestyles of the ruling classes, which constitutes only of the country+s

population.#A/out #" percent is spent to finance the constant deficits in the colonial trade

and to fund go*ernment operations, more than ! percent of which are spent on paymentsof local and foreign de/ts and lost to corruption. Finally, only "! is used for the

de*elopment of the means of production.

0onse1uently, the economy has remained agrarian, /ac)ward and pre-industrial.2eanwhile, the li*es of the people 3 the industrial proletariat, semi-proletariat, poor

peasants and lower middle peasants who rely on selling their la/or power to augment

their farm income, and the petty /ourgeoisie 3 ha*e progressi*ely deteriorated.

Objectives of the Wage LawsThere are already twenty-one wage laws executed /y the Philippine (tate since #$%#. Thelaws, the years of their execution and the corresponding minimum wage granted are the

following4

Table 1. 1951-1989Wage Legislations Granting Increases in the Basic Minimum

Wage2

Eecti!it"

#ate

$r%er&'ctecree

Minimum Wage(in )h)*

+on-'griculture 'griculture

Metro Manila

$utsi%e

Metro Manila Metro Manila

$utsi%e Metro

Manila

5 August #$%# Minimum Wage La, (' /2* 5.!! 5.!! ".%! ".%!

' August #$ Lan% eorm 0o%e (' 8* .%! .%!

"# April #$% ' 18/ .!! .!! .%! .%!

#' 6une #$ ' 3/3 .!! .!!

#& 6une #$&! ' 129 '.!! '.!! 5.&% 5.&%# 6une #$& )resi%ential #ecree 928 #!.!! $.!! &.!! .!!

# 6uly #$&' )resi%ential #ecree 189 ##.!! #!.!! '.!! &.!!

# April #$&$ )resi%ential #ecree 11 #.!! #".!! #!.!! $.!!

#' August #$'! )resi%ential #ecree 131 #5.!! #.!! ##.!! #!.!!

# 6anuary #$'# )resi%ential #ecree 1351 #'.!! #&.!! #%.!! #5.!!

6uly #$' Wage $r%er +o. 2 #$.!! #'.!! #.!! #%.!!

# 7o*. #$' Wage $r%er +o. "!.!! #$.!! #&.!! #.!!

# 8ec. #$' Wage $r%er +o. "#.!! "!.!! #'.!! #&.!!


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# 2ay #$'5 Wage $r%er +o. ".!! #.!! "&.!! "#.!!

# 6une #$'5 Wage $r%er +o. 5 %.!! 5.!! !.!! "5.!!

# 7o*. #$'5 Wage $r%er +o. &.!! .!! ".!! ".!!

# 2ay #$'& E4ecuti!e $r%er +o. 138

5.!!

5#.%!a&

5%.!!

5!.%!a&

'.%!

%.!!a&

!.!!

"'.!!a&

# 9cto/er #$'& E4ecuti!e $r%er +o. 138

%5.!!

5.!!a&

%.!!

5%.!!a&

55.!!

'.%!a&

.%!

!.!!a 6anuary #$'' E4ecuti!e $r%er +o. 138 %5.!!a& %.!!a& 55.!!a& .%!a&

#5 8ec. #$'& eublic 'ct / 5.!! 5.!! %5.!! 5.%!

# 6uly #$'$ eublic 'ct 323

'$.!! '$.!! &$.!!

&5.!!b&

%'.%!

a& Applica/le towor)ers in esta/lishments with less than ! employees and with paid-up capital of PhP%!!,!!! or less.

b&Applica/le to wor)ers in plantation esta/lishments with annual gross sales of less than PhP%2illion.

Though expressed in decepti*e language, the parameters of wage determination set /y allof the laws ha*e always /een /ased on two paramount o/:ecti*es4

#. The maintenance and reproduction of a *ast army of undernourished and

undereducated wealth producers that correspond to the la/or re1uirements of a/ac)ward economy.

The laws express this in pseudo-humanitarian terms li)e the need for

sufficient wages to maintain the health, efficiency and general well-being,34

etc.of the wor)ing classes. 7onetheless, the descent of the li*es of the

people to deep po*erty exposes the exploitati*e nature of the laws. The

Philippine go*ernment itself, since it started estimating the extent of po*ertyin the country, admits that the magnitude of poor indi*iduals nationwide was

5$. in #$'%, 5%.% in #$'', 5.% in #$$#, 5!. in #$$5 and .' in

#$$&.%

". The guaranteed extraction of huge profits /y the local ruling classes and

imperialism.

The wage laws express this in pseudo-democratic language li)e ; to allow

business and industry reasonable returns on investment, etc.6Regardless of

the sugarcoating, figures pro*ided /y the 7(0except during 2artial ?aw when 2arcosunilaterally determined wage le*els@ is the appointment of wage /oards. The wage /oards

trac) de*elopments in the local economy and recommend or determine therefrom the

le*els of wages to grant the wor)ing people. 0learly, these are created to ensure the

promotion of the interests of imperialism and the local ruling classes during deli/eration


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of wage matters. The mem/ers of the wage /oards mainly come from representati*es of

the go*ernment and pri*ate property owners themsel*es. Representati*es from the pu/lic

or from the la/or sector are appointed to pro*ide a democratic facade. owe*er, the/latantly exploitati*e nature of all the wage laws /etrays either the puppetry or impotence

of the so-called la/or representati*es.

The setting of wages e*ol*ed in a manner that conforms to the escalating crisis of the

semi-colonial semi-feudal economy and of the world under imperialism. The changes

too) place in three distinct periods pre-2artial ?aw or from #$%# 3 #$&", 2artial ?aw orfrom #$&" 3 #$', and from #$'& 3 to the present.

)re-Martial La, Wage La,s an% Their Imacts

Fi*e wage laws were legislated during this period 3 RA !", '55, 5#'!, 5&!& and #"$.The Philippine 0ongress and (enate enacted these laws. A distinct

attri/ute of these pre-2artial ?aw wage laws is their recognition of the

most oppressi*e feudal relations li)e tenancy where landlords ar/itrarilydetermine the share of their tenants, feudal ser*itude and other forms of

feudal rent. These ensured that the *ast ma:ority of the wor)ing people

remain ensla*ed /y feudalism. These also set the precedent for the pro-feudal /ias of succeeding wage laws.

From the first law RA !" enacted in #$%#, wor)ers in landlord estates >from #" hectares

up@ were discriminated to recei*e &.% less than their counterparts in thenon-agriculture sector. The law also prescri/ed that the tenants that

comprise the ma:ority of wor)ers in these estates are not co*ered /y it.

Tragically, it did not recognize or it glossed3o*er the fact that all familymem/ers of tenants exert la/or to produce commodities in the estates. Bt

also safeguarded the right of landlords to exact feudal ser*itude from their

tenants /y exempting domestic ser*ants from its co*erage. Finally, itallowed landlords to deduct up to ' or PhP#.%! of the PhP#.&%, '' or

PhP#.&% of the PhP".!!, and $! or PhP"."% of the PhP".%!, for rent li)e

/oard and lodging etc. from wages granted /y the law for the

corresponding #st, "ndand rdyears.

(ince then, /y reactionary legal fiat, the poor peasants, lower middle peasants andfarm wor)ers in feudal estates ha*e /ecome the most oppressed section of

the Filipino wor)ing classes. i.e. share-tenancy andfeudal ser*itude, etc.@ and semi-feudal relations >i.e. wage-la/or relations with rents

eating up '-$! of wages@ ensured that4

#. The economy remains /ac)ward and agrarian. 8enied of their :ust share fromthe fruits of their la/or, the peasants 3 to o*ercome star*ation 3 are forced to

rely on petty production for direct consumption including small-scale


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/ac)yard gardening and animal hus/andry, food gathering from the land,

forests, mountains, ri*ers and the sea. =ith no surplus to in*est in upgrading

production tools they are forced to produce handcrafted agriculturalinstruments. The utility of these primiti*e instruments 3 some wor) animals,

/olo, sic)le, plough, hoe, sho*el, /ag and sac), etc. 3 handcrafted /y the

peasants for the feudal estates are in reality part of the land rent.

As all these products do not pass through the mar)et, these are not reflected in

the national accounts that understate /y an incredulously wide margin theshare of agriculture in the C8P. This pro*ides the Philippine (tate

ammunition to assert that the Philippine economy has continuously

industrialized. 2ore importantly, the wage /oards use the understated la/or

producti*ity in the agriculture sector as /asis to insist lower wage le*els forwor)ers therein.

". The main producti*e force,&the star*ed peasantry, ser*es as an endless source

of la/or power desperate to find :o/s as seasonal farm wor)ers in feudal andimperialist-owned estates producing commodities li)e copra, sugar, /anana,

pineapple etc. for export. 9r as low paid wor)ers in /ourgeois comprador andor imperialist-owned manufacturing and ser*ice firms in the cities or in

extracti*e industries li)e mining and logging.

Bn later years, a /ig part of this huge army of excess la/orers /ecame prime

commodities for export. From the #$&!s, exporting of millions to wor) in

imperialist-owned firms in other third world countries li)e the 2iddle East

/egan. Exporting women to /ecome domestic helpers in places li)e ongDong or prostitutes in countries li)e 6apan /egan in the #$'!s. From the #$$!s

commenced the export of professionals from the petty /ourgeoisie especially

nurses, doctors, midwi*es and other health wor)ers to ser*e as low-le*elmedical personnel in imperialist states.

9f course, these pre-2artial ?aw wage laws setting the precedent for the clear pro-feudal/ias of succeeding wage laws does not mean that these and their successors are pro-

industrial wor)ers. 7on-agriculture wor)ers, especially the industrial proletariat, in

manufacturing firms owned /y imperialism and the /ourgeois compradors suffer a higher

rate of exploitation due to their higher rates of producti*ity.

Table 2. Magnitu%e o Labor E4loitation 6n%er the 5 )re-Martial La, Wage La,s8

(In )h) at 0urrent )rices*

7ear Labor

)ro%ucti!it"9

'!erage Wages 6nai% Labor1/

'mount

o alue

0reate% 'mount

o alue

0reate%

#$% #,"%#." .& "$.! ''&."5 &!.$5

#$%& #,5$." 5$&.5& .' '%".#% .#5

#$%' #,%!.# 5$'.' .$% '%#. .!%

#$%$ #,55.%$ %"." .'# $#.$& &.$#$! #,%&'.5! %&%.$5 .5$ #,!!".5 .%#

#$# #,%''.#! %&'."% .5# #,!!$.'% .%$


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6/13

#$&! $,%! #5,%$ &.#! ##,%# "$.#5 ,$ $."' ; ; ',5" "#.5

#$ 5&,5' #',!5 $.!5 #",'$5 "&.! 5,5% $.% ; ; #!,!#% "#

; The economy achie*ed trade surplus during the year+ote


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#$'% #,%.! &"!%.!# "".'% "5,"&.$ &&.#%

#$' ","%. &,%.&! "." "5,$!.!# &.'

;7o data figures from 89?E on employment for the year is not a*aila/le.

The maintenance of the same magnitude of exploitation throughout the #$&!s and its

a/rupt increase in the #$'!+s certify the reactionary nature of the 2artial ?aw wage laws.

The wor)ing people only got $.%" of the wealth they produced from #$&"-#$&% whilethe ruling classes and imperialism ac1uired !.5'.

=hile the le*el of exploitation remained, the dictatorship made cosmetic reforms in otherareas of wealth appropriation in the #$&!s.


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#. igher wages is not good for the economy /ecause it scares away foreign

in*estments >i.e. foreign mono#oly ca#ital@ that presently employs a /ig part

of the la/or force.". =age le*els in the Philippines are too high. Bn fact, it is highest in the region.

. Cranting wage increases would lead to the /an)ruptcy of small and medium

scale enterprises.5. =age increase is impermissi/le at this time /ecause of the fiscal crisis.

Preposterously a/sent from these discourses are the aims of guaranteeing the rights oflabor to its 'ust share in the fruits of #roduction, and ensuring a decent standard of living

for the wor$ers and their families.?i)ewise, these di*ert discussions away from the

irrefuta/le relationship of e*er-increasing profits and e*er-increasing po*erty conse1uent

to the machination of the ruling classes in implementing the law.

Table . Magnitu%e o Labor E4loitation 6n%er E$ 138= ' / an% ' 32319

(In )h) at 0urrent )rices*

7ear Labor

)ro%ucti!it"2/

'!erage Wages 6nai% Labor21

'mount

o alue

0reate% 'mount

o alue

0reate%

#$'&; 5,!&! '," "5."% "%,'!& &%.&%#$''G &,'' ','%& ".% "','# &.%

#$'$ 5","5" ##," ".& !,$& &.

#$$! 5',5$' #","! ".!" %,'&' &.$'

#$$# %5,5% #,&5" "%." 5!,&" &5.&&

#$$" %&,!& #5,"#' "5.$" 5",'#$ &%.!'

#$$ !,5& #%,"% "%.#$ 5%,"' &5.'$

#$$5 &,# #&,!$& "%."' %!,%5 &5.&"

;nder E9 #&' and RA 5!

Bt is e*ident that la/or producti*ity has /een growing at a *ery past pace such that the

producti*ity in #$$5 almost dou/led that of #$'&. owe*er, wages ha*e stagnated at a

mere 1uarter of the *alue each wor)er produced e*ery year. The &5.$ a*erage of unpaidla/or for the indicated years is the worst in Philippine history. 2eanwhile, the allocation

of the wealth produced show the increased a*arice of imperialism and the ruling.

Table 5. 'roriation o the Wealth 0reate% 6n%er E$ 138= ' / an% ' 323(In )h) Millions at 0urrent )rices*

7ear G#)

0onsumtion o

Wage

Earners

0onsumtion o

the ich22Go!ernment

E4en%itures

0olonial Tra%e

#eicit

0aital

:ormation

'mount

o

G#) 'mount

o

G#) 'mount

o

G#) 'mount

o

G#) 'mount

o

G#)

#$'& '",&5 #%,%'5 "5."% #,&5 5.

$

%&, '.5! ; ; ##$,5& #&.%

#$'' &$$,#'" #'&,'! ".%! &!,$%$ 5.5

"

&",#' $.! ; ; #5$,#$ #'.&

#$'$ $"%,555 "5,'"! ".& 5!",5% 5.5

$

'',#' $.% #$,$%& ".# #$$,$!! "#.


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#$$! #,!&&," "'!,!$ ".!" 5',&%" 5%.#

$

#!','5 #!.# ",# %.&& "!,#% "5.#%

#$$# #,"5',!## #5,'$ "%." !#,5$# 5'."

!

#",''% $.$ &,"# .! "%","& "!.""

#$$" #,%#,%%$ ,$#5 "5.$" '","$% %!.5'

#!,%"5 $. ,"!% 5.$ "'',5!# "#.5

#$$ #,5&5,5%& ,5& "%.#$ &%#,!# %!.$5 #5$,!%& #!.## #"5,% '.5$ %,%$% ".$'

#$$5 #,$",$" 5"&,$ "%."' '!,&'& 5$.!

&

#'",&& #!.' #!,&$ .# 5!&,& "5.!

#$$% #,$!%,$%# 5'",%&! "%." $"$,5 5'.&

"#&,!5% ##.$ #5%,#"# &.# 5"&,'$ "".5%

#$$ ",#,$"" %,' "%.$% #,!#,! 5&.%!

"%$,%!# ##.$% #$!,'$ '.&$ %"#,!% "5.!#

#$$& ",5",&5 !,# "&."! #,#!#,'&% 5%.5

#

#$,$% #.' "%!,'# #!.5 !#,"55 "5.&'

#$$' ",%,!! &%",$5 "'."% #,""&,#"5 5.!

5

%5,5! #. #&, . %5",!$$ "!.5

;The economy achie*ed trade surplus during the year+ote


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history of wage setting in rp

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