High inflation has eroded 2022 wage hike effect–IBON


PROTRACTED high inflation since the last quarter of last year has now completely eroded the improvement caused by the last round of minimum wage hikes of the regional wage boards, according to an independent think tank.

Based on its computation, IBON Foundation said the real wage in January of non-agriculture minimum wage earners in the National Capital Region (NCR)—the highest rate nationwide—was down to P482 after the inflation rate reached a staggering 8.7 percent.

The latest real wage value was lower compared to that of last May, when it was at P484.

The National Wages and Productivity Commission (NWPC) defines real wage as the highest nominal minimum wage over the consumer price index (CPI) for the month times 100.

The value of real wage recovered to P508 in June and July, 2022 after the Regional Tripartite Wages and Productivity Board (RTWPB) issued new wage orders.

IBON’s data showed this was reduced by P26 in January due to the rising cost of basic goods and services despite the much-touted economic growth by the government.

“The Marcos Jr. administration has also been grossly negligent on the income front. Despite high prices and hype about the economy reopening, the minimum wage hasn’t been increased,” IBON said in a statement.

Apples and oranges

Labor groups noted the reduction in the value of real wage could be as high as P88 after they subtracted the prevailing P570 nominal wage of non-agriculture workers in NCR with the P482 real wage.

IBON Executive Director Jose Enrique “Sonny” A. Africa, however, noted that such exercise was incorrect.

“It is a wrong exercise to subtract the nominal wage from the real wage. The real wage only makes sense if you compare the value of a number between years …it is like apples and oranges,” Africa told BusinessMirror in a phone interview.

But while it disagreed on the computation on the real value of wages by labor groups, IBON supports their call for the government to provide assistance to people, who are now living in poverty.

“The Marcos Jr. administration is directly accountable for the increase in poverty and protracted suffering of the people. As soon as coming into office last year, it could have provided relief that the previous government refused to give,” IBON said.

No official data

Following the spike in inflation rate in September 2022 to 6.9 percent from 6.3 percent in the previous month, the NWPC stopped posting new real wage data on its website.

In a letter obtained by BusinessMirror, NWPC explained it stopped issuing real wage data in its website with reference to Executive Order (EO) No. 352, or the “Designation of Statistical Activities that will Generate Critical Data for Decision-Making of the Government and the Private Sector.”

It noted real wage is not included in the 67 designated statistics/statistical activities covered by EO 352, which was issued by former President Fidel V. Ramos way back in 1996.

Prior to Sept. 2022, NWPC posted the monthly real wage on its website (https://nwpc.dole.gov.ph/stats/current-real-minimum-wage-rates/).

Labor groups use real wage data in preparing the wage petitions, which they file before the RTWPBs.

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