Addressing the Principle of Minimum Wage Fixing: An Initial Approach to an Efficient Labor Costing

ANTO COMETA

Several theories and models on wages have been developed in order to address the dilemma in the structure of labor costing. Fixing wages covers a wide range of factors affecting both the supply and demand of the labor market as well as economic and political conditions and policies of a country.

One of the components that need to be attended to is the principle of minimum wage fixing. Minimum wage is a good and reliable reference of the standard of living of the workers particularly in developing or third world countries such as the Philippines. In this particular case, the dependent variable which is the minimum wage determines the outcome or the output of the independent variable which is the living standard of the workers. This could assist in the initial approach on how to properly put forward an efficient labor costing policy and structure across economic sectors and industries.

According to the Labor Code of the Philippines, the determinant of the minimum wage in the country constitutes a near satisfactory level that could sustain the living conditions in terms of the basic necessities of the worker. “The regional minimum wages … shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program.”[1]

As avowed in the labor code, the minimum cost of labor ensures sufficient remuneration for the worker in order to suffice the cost of living or the standard living necessities of the individual (and their families). However, in this regard, the minimum wage does not entail improvement in the economic situation of the individual. This is just a mere “pay the rent” principle whereby an individual works in order to live by the day.

Minimum labor costing should intend to address poverty and guarantee the sustainability of the necessities of the workers and their families. A study conducted by Catherine Saget of the International Labour Organization (ILO) with reference to the minimum wage and its impact on the nation’s poverty suggests there is evidence to support that minimum labor costing can take an essential part in the reduction of poverty of a country. [2] In relation to the evidence, at least three premises should be sufficed - (1) most workers should be entitled to get at the least the minimum wage, (2) compliance of employers with the minimum wage regulation and there should be (3) no price increase in commodities following the augmentation in minimum wage. Accordingly, if the three conditions were met, the principle of minimum wage to surmount poverty and meet the requirements of satisfying the necessities of the workers and their families is feasible.

One of the major hindrances aside from the economic condition affecting the country and its labor market is the revenue acquisition of the employers. Employers are quite concerned in the maximization of their profits. Most if not all adheres to the principle of sticky wages. By not promptly responding to the changes in wage levels in the labor market, revenue exceeds the cost of hiring the worker. This is also applicable in hiring additional workforce in their business.

The principle in minimum wage fixing will remain abstract if it would not be applied and stringently implemented. The most viable way of addressing both social and economic issues and eventually arriving to a resolution is through social dialogue in different forms and levels between the tripartite partners.[3] In the paper published by the ILO authored by Tayo Fashoyin, discourse and consultation between the workers (with their organizations or trade unions), employers and the government as well as other relevant stakeholders is a useful measure of developing agreements on policy issues.

Coming to agreements and formulating policies based on the consensus of concerned parties plays a fundamental function in shaping the labor market and relevant institutions as well as the economy of the country. An efficient minimum wage fixing could pave the way not only to an efficient structuring of labor costing but also to the development of the country and its economy.

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[1] Art 124 of the Philippine Labor Code, www.dole.gove.ph/laborcode/

[2] Catherine Saget, Minimum Wage – Does it Cut Poverty?, http://www.ilo.org/public/

[3] Tayo Fashoyin, Social Dialogue and Labour Market Performance in the Philippines, http://www.ilo.org/public/

Earrings With Feelings

ANTO COMETA

I’m promoting my friend’s business, let's support Filipino domestic entrepreneurship.

earrings with feelings.

abubot.

palamuti.

kerengkeng.

sabit-sabit.

borloloy.

palawit.

They are selling funky earrings made mostly out of wooden and glass beads. If you want an alternative pair of earrings for your fashion accessory that is very unique and affordable, you may place your order(s) by contacting them through the following numbers:

Jasmine - 0917-8978562

Riza - 0917-8502849

Ros - 0919-2394114

Email: earringswithfeelings@gmail.com

Blog: http://earringswithfeelings.blogspot.com

The (Over)View of Pluralism

ANTO COMETA

“If pluralism is a valid view, and respect between systems of values which are not necessarily hostile to each other is possible, then toleration and liberal consequences follow, as they do not either from monism (only one set of values is true, all the others are false) or from relativism (my values are mine, yours are yours, and if we clash, too bad, neither of us can claim to be right).”

– Isaiah Berlin

Pluralism holds the view that diversity amongst individuals and groups is a significant factor that is quite essential and beneficial to society. It is defined in the context of liberal democracies wherein the concentration of power should not be exclusively held by a single or group of elites but should be dispersed among the various ideological and economic pressure groups of the society.[1]

The players of pluralism referred to as the pressure or interest groups interact with each other in such a way that they may be able to compromise, compete, have a concession and negotiate with each other. The primary objective is for the group’s principle to develop into the dominant interest and to eventually become the majority. However, given the system in which they operate, pressure groups tend to be controlled and confined within the premise of the system itself.

Pressure or interest groups represent the positions of the bloc or people they belong to. These groups act based on the beliefs and common goals that they share with the rest of the faction. The significance of pressure groups is situated in the ideology and manner of influencing the public or liable parties. They seek to convey their causes, advocacies and programs by influencing people or society in general. These groups are entirely different from political parties - Political parties seek to convey their concerns by being elected in public office whereas pressure groups put across their concerns by influencing the public or the different sectors of society through awareness and persuasion.

Antagonism towards other pressure groups could generate instability and disorder within the system. It could be extremely despotic, which could present threat to the current libertarian state of the society or nation. In order to re-establish pluralism, the dominant group should be removed from the system or be replaced by a less domineering group having the same ideology.

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[1] Pluralism, http://concise.britannica.com/ebc/article-9060460/pluralism

The Story of Milk and Coffee

ANTO COMETA

Last Saturday, after our 1-4 pm class under Dr. Bach Macaraya, me and my friends in graduate school – Bossing Jess, Atty. Cathe and Jef decided to go out for a wholesome afternoon engagement - discuss IR concepts or anything under the sun while drinking milk (seriously) and coffee. However, it turned out to be an alcoholic drinking spree of a juvenile slave driven employee and three established professionals. What happened to the milk and coffee?

Initially, we were supposed to go to a coffee shop because Jess was quite sleepy even after the class (although the class was not that boring - thanks to one of our classmates who for the nth time never failed to piss everyone in class by his thoughtless remarks and questions), Cathe craves for milk and Jeff, even though he already left early, text messaged that he will join us as soon as he’s done with the activity that he’s currently engaged in.

Downstairs we met up with our groupmates Erika and Elo to discuss who will be the members of our next reporting session (we have decided to distribute the members into two groups for the remaining two concepts that we have to cover for the course). Even after we have settled the matter, we were still indecisive as to where we were going. Elo suggested a nifty place where we could drink coffee and milk with the ambiance and all. Without any qualms, we decided to go the place that Elo suggested. We asked Elo and Erika if they wanted to join us. Erika declined because she’ll be traveling a couple of hours going home (she lives in Laguna), she can’t afford to stay late, while Elo still has a class until 7:00 pm. Elo said he will just follow as soon as his class ends and if we are still there.

Anyway, we went to the establishment Elo suggested. When we arrived at the place, we asked one of the personnel if they are serving milk and coffee. The personnel seemed stunned by my question; he said “sir ano po kape at gatas” with a baffled look in his eyes. I replied “oo kuya, gatas at kape, bakit wala ba dito noon?” He just smiled and said “wala po”. I replied again and said “seryoso, talagang walang kape at gatas dito?” The personnel didn’t answer back anymore and just turned around and went to the counter. I couldn’t say anything other than “sira ulong Elo yun ah” and then we laughed. We have no choice but either go to a coffee shop or just settle there and drink whatever they have. The three of us agreed that we just stay there.

Jef finally arrived after several minutes, Jess and I decided to drink beer instead, while the two ordered chamomile tea. Actually, I’m not so sure at that time if I really wanted to drink alcohol since it’s been 3 days (not consecutive though) that I have been drinking. Nonetheless, I still ordered beer, I can’t resist the temptation. After an hour and a half of academic discussion, two refills of chamomile tea and six bottles of san mig light. Cathe and Jef decided to drink booze as well. It was already almost 8:00 pm when Elo arrived. It has been four hours since we step foot on the place. After an hour, another two rounds of beer (that’s almost 9:00 pm if I’m not mistaken), senseless jokes and hard laughs because we were already under the influence of alcohol (note: we are not yet drunk), Jess called my attention and said that he has to leave because he still has to fetch his daughter in school. Elo seconded, that he also needs to go because he has another affair to attend to. So it would be me, Cathe and Jef who will be left after the two departs. The three of us decided to continue our alcohol binge at a nearest bar where we could have a bit of live music to listen to – 70s Bistro. It was me who suggested the place since I know that the band Color It Red will be playing.

Cathe and I had a round of beer while Jeff ordered iced tea. At that point, I’m getting a feel that it will be me who will be left drinking alcohol before the night ends. Before the band started, we had a series of good laughs and foolish stories shared. I just realized that our beers where already consumed. Jef asked if we wanted to have another round, without any hesitations I said yes. On the contrary, Cathe refused to have another beer and ordered coffee instead. Jef also ordered coffee. And I was right… it was victory for me. I realized that I’m becoming some sort of a juvenile drunkard, tagging along with professionals, so much for the initial plan of coffee and milk. Well, the two had their coffee, I didn’t. Anyway, we went home almost 1:00 am (Thursday). Before we parted, Cathe asked me If we could go back to 70s bistro to watch again Cookie Chua since she enjoyed the gig, and also to catch a glimpse of Julianne’s performance… I said yes. This time...no doubt, would be a story of booze and artists (and industrial relations I guess) and not an account of what happened to the milk and coffee group date.

This is a nonsense narrative…

Synopsis of John Dunlop’s Industrial Relations Systems

ANTO COMETA

John Dunlop’s analysis and study of the concepts, structure, function, practices, outcome and the institution that are constitutive of the employment relationship have paved the way in the establishment of the main framework of an industrial relations system.

According to Dunlop, the system is composed of three main actors and their organizations, the context or setting in which they interact, the common ideology held by the actors and the body of rules that govern the system. These are the fundamental components that shape or outline the industrial relations system in which they belong to.

The actors - hierarchy of managers, the hierarchy of workers and the specialized government agencies are the central personas in an industrial system. The interaction and relationship within the three creates the set of rules of the workplace or the principles of the system. Establishment (and development) of the set of rules is the focus of an industrial relations system. The body of rules in the system administers the actors in the place of work. The function of experts and professionals are very crucial in order to establish and govern the body of rules in the system. This are organized and consists of (a) procedure and authority for making rules (b) substantive rules - related to market or budgetary constraints and related to distribution of power in larger society such as compensation, duties and discipline as well as the rules of discipline and (c) administration of rules governing work place and the work community which involves policies of management hierarchy, laws of worker hierarchy, regulations / decisions/ orders by government agencies, collective bargaining agreements and the customs and traditions of work place and work community.

The entire industrial relations system becomes (or mandated to be) stable because of the common ideology or beliefs shared by the three actors of the industrial relations system. It should be fitting and consistent to allow a mutual set of ideas that identifies an acceptable role for each actor. This also characterizes and delineates both the position and function of each in the entire system or their relationship with the rest of the actors. These set of ideas or beliefs are the factors that integrate the system as a unit. Displacement of the existing ideological equilibrium takes place when a belief has a significant modification. Accordingly, this will create a new position or set of rules within the entire system.

The system operates within or prescribed by technology, product markets as well as the locus and distribution or power in society. These are the contexts or environments in which the main actors interact. The technological characteristics of the place of work may influence the type of management of a particular work community as well as the organization of its workers. Moreover, this may also dictate the required labor force of the organization, the requirement for supervision and possible regulation of the government or government agencies. Product markets for the most part affect management group, however, this is dependent on the type of system in which it operates. The distribution of power is not within the confine of the industrial relations system. This operates outside of the system yet influences the key actors of the system itself. These are types of power orientation or authority that has direct influence over the key actors.

The industrial relations system necessitates unison, interdependency and equilibrium of the components. Even if the balance in the system is displaced, it would be re-established on condition that no major alteration would occur in the actors, contexts and shared ideology.

Multi Tasking - A Disambiguation for a Slave Driven Job Function

ANTO COMETA

There’s a clear distinction between performing different tasks in order to be familiar with certain functions needed to execute appropriately a particular designation and requiring or dealing with various responsibilities to be able to swathe a nugget of activities essential for the business operation. If we will take the latter as the principle of multi tasking, it is a clear manifestation of employee mismanagement or human capital exploitation.

In third world countries such as the Philippines, the concept of multi tasking is a widely imposed attribute carried out in work places across all industries. Fraudulence in job acquisition has been one of the major sources of grievances and dissatisfaction by majority of workers who were given clear job functions prior to the commencement of the assigned task(s) and then transcended to deviations of the normative occupational description during the course of the worker’s employment in the company.

Multi tasking has been widely exercised and expected to be part of the job. In most cases, companies require the worker to perform several tasks which are oftentimes beyond the scope of the designation given. Even if the title or the role of the employee limits or sets the scope of the functions to a specific area of accountability, it has a propensity of being extended or curled in order to give way to lengthened work assignment.

Companies have a notion that multi tasking is not a bad business concept as it facilitates management of its resources, predominantly for those that do not have sufficient means to acquire or increase the manpower. This cuts or saves operational cost since it necessitates several different tasks to be performed by an individual. However, there is an important factor that has been overlooked which is directly connected to the systems of operations of a business, and that is the capitalization or investment in employee productivity. Productivity is measured or defined by the output generated by the individual in terms of the goods produced or services rendered. In labor terms, it is usually determined or quantified as the output created by the worker in a certain period of time.

Labor productivity is more often than not misrepresented as an exclusive central component of business operations. Employee productivity does not only shape the mechanism of the business but also affects the entire industry. It is not limited to the execution of tasks in the organization. It also concerns the development of the individual in terms of work and contribution in the industry and society. Multi tasking oftentimes hinder both the productivity and the development of the worker as efficiency, delivery and quality are compromised. Consequently, the worker and organization suffer from the cost of employing such aspect.

Rebuilding the Culture of Industrialism in the Philippines

ANTO COMETA

In the early 1980s, the economic condition of the country started to experience a stumbling block that has greatly affected the major sources of the nation’s revenue. This period marked the major decline in Philippine exports in the global market and has also affected the credit rating and borrowing of the country in international financial institutions. The fell of the industrial sector (as well as the agricultural sector) in the country could be attributed to the economic crises that the country has experienced. But was it mainly on these crises that the industrial sector had befallen to its current state? How could we revive an industry that has been in its lowest depth (as far as the country’s condition is concerned) for decades?

Before the 1970s, the country has been exporting primarily raw or semi processed goods such as mineral products. Years after, the country has been exporting manufactured commodities chiefly electronic components and garments.[1] This has boosted the Philippine economy which made the country more affluent compared to the neighboring countries in the region. However, the growth in Philippine industries stagnated – there were no increase in both production and employment. The manufacturing output of the county was cut down because of both political and economic crises in 1983.[2] By the middle of the period, the current administration then developed economic restructuring programs in order to propel the wobbly industry. The economic plan was then effective which made the industry working at full capacity again. However, the programs implemented not were not sustained or fell short of efficacy on a long term period.

The fall of the industry has evidently affected the labor sector. This increased drastically the rate of unemployment which led to the brutal fact of people going abroad to earn sufficient money for their families. The per capita income of the country was intolerable (actually until now). The 1993 GNP of the country was estimated at $830 having an annual GDP per capita growth of .065% between 1986 and 1993.[3] This has increased the percentage of the country’s population below the poverty line.

After a decade, the impact of globalization has significantly aggravated the current condition of the industrial sector in the country. The move towards globalization is not a dreadful economic step. However, the number and share of foreign equities in the business sector compared to local is increasing, thus affecting the domestic businesses in general. Currently, the largest sector in terms of the country’s economic revenue generating component is the services sector. Business Process Outsourcing (BPO) companies constitute the largest part of the services market. Ample number of the labor force in the Philippines is employed in these businesses, majority of which are operated by foreign entities.

There are still industrial businesses that are operating in the country. Although for the most part, these are oligopolistic businesses which are run by a handful of family business tycoons way back the start of industrialization in the country. They have survived by cutting down the cost of their operations - downsizing their manpower and usage of available technology for their businesses.

The attitude and practice of domestic entrepreneurship as well as investing in industrial businesses has been considerably decreasing if not nominal due to the economic impediments and lack of efficient programs, support and policies governing the domestic market. If we were to trace the setback, it started from the crises that the country have faced and has been intensified due to short lived and unsupported domestic economic strategies. If we were to revive the industrial sector, the government should pay much attention to the domestic market concerns. The government should invest more on reviving local industries such as setting limit if not a decrease in the entry of imports and expand the domestic industrial market output and exports. This should be backed up by both fiscal and monetary policies in order to protect and gain confidence that the industrial businesses could still be profitable.

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[1] Economy of the Philippines, http://countrystudies.us/philippines/

[2] The Industry, http://countrystudies.us/philippines/

[3] The Philippines, http://www.unsystem.org/SCN/archives/rwns94update