THE government ruled out mandated pay increases for some 41 million state and private sector workers ahead of this year’s Labor Day celebration, causing the country’s largest trade union confederation to give President Benigno Aquino III a failing grade.
“On a scale of one to 10, we gave him below five, because he did practically nothing to improve the welfare of the workers,” said the president of the Trade Union Congress of the Philippines, which groups about 40 labor federations.
He also chided the President for failing to offer a plan, “not even in broad strokes,” to address growing unemployment.
A Palace spokesman said Wednesday that the President had already ruled out a pay hike for the country’s 1.6 million state workers, saying there is no budget for a wage increase.
“The President had already met with labor yesterday (Tuesday) and discussed... what can be done, [and] what...cannot,” said presidential spokesman Edwin Lacierda.
He added that the President has asked Labor Secretary Rosalinda Baldoz and Internal Revenue Commissioner Kim Henares to discuss some of the concerns raised by the labor groups.
“There will be a sit-down with the labor sector again,” Lacierda said.
Baldoz, meanwhile, said the government would not be announcing any increase in the minimum wage for private workers, either.
“We don’t have any mandatory wage increases as our gift to the private sector workers for Labor Day,” Baldoz said in a media forum.
The best gift the government can offer for Labor Day is the 137,000 job vacancies that will be offered in 69 job fairs nationwide, she added, urging private companies at the fairs to increase their hiring rate.
Baldoz said there would be no wage hike announced since the law says such increases must come from the regional tripartite wage and productivity boards.
Lacierda said in the meetings with labor, the President was “mindful of inclusive growth, which should benefit all.”
“One of our main statements is that nobody should be left behind,” he said.
In Tuesday’s meeting, the President told labor leaders the government could not afford to give state workers another increase.
“I want to be frank if you would allow me. It’s easy to make promise, but if I make a promise... whether it’s easy or difficult, I have to do it,” he said.
He said this was the same response he gave last year to the labor groups ahead of the Labor Day celebration.
“We had just finished paying the last mandated increase. Congress passed it,” said Aquino, referring to legislated increases under the Salary Standardization Act.
The President also told labor leaders that granting another wage hike would result in a budget deficit and hurt the country’s credit rating.
Labor groups had earlier said they no longer expected any wage hikes from the administration, while employers and business groups expressed relief that they were not pressing the issue.
“This is good news. This means we’re helping each other. And this will help the country,” said Philippine Chamber of Commerce and Industry Alfredo M. Yao.
“I understand that employees value monetary incentives like an increase in the basic salary. But there are also non-monetary incentives, I believe, [that] will persuade them do their jobs better,” he said. “Perhaps employers can also think of other ways to compensate their workers.”
The country’s biggest group of employers said it was looking forward to more years of industrial peace.
The Employers Confederation of the Philippines said industrial peace is necessary to support economic growth.
“Without industrial peace we cannot compete especially with the coming regional economic integration,” said confederation president Edgardo D. Lacson.
Lacson noted that the country has enjoyed industrial peace for the last 10 years, with fewer instances of strikes.
He added that employers and workers have “nurtured the bond of partnership,” which was the key to fostering industrial peace.
The group also credited the labor sector for its continuing commitment to the principle of tripartite decision-making.
Organized labor accounts for about 500,000 employees out of about 40 million workers.
There are about 17,000 organized labor unions and two unregistered groups, including the militant Kilusang Mayo Uno (KMU).
The TUCP on Wednesday also chided tthe President for failing to respond to important issues raised by labor representatives during their meeting in Malacañang Tuesday.
Herrera said that in his almost four years in office, President Aquino has failed to address high unemployment.
“When the President began his term, the official national unemployment rate was 7.0 percent in July 2010. Now, the unemployment rate stands at 7.5 percent, as of January 2014,” Herrera said.
“We are deeply disappointed that up to now, the administration has not offered – not even in broad strokes – clear-cut strategies as to how it intends to forcefully create new jobs,” said Herrera, a former senator.
The labor coalition Nagkisa also slammed the administration.
“President Aquino continues to ignore for four years the issues [important to labor]...Workers are deprived of the benefits due them despite of their great contribution to improving economy,” the group said.
It said Aquino was remembered every Labor Day as the leader who abandoned and failed them at the critical moment when they needed his leadership to address joblessness, the rising cost of living, precarious work arrangements and the high cost of electricity.
The group said the growth that Mr. Aquino pointd to was shared only by a few.
To make their sentiments known, the group planned to muster 30,000 members to march from the Welcome Rotunda to Mendiola near the Palace. The group will assemble along España at about 8 a.m.
“We need sound, aggressive and actionable strategies to propel jobs growth in an orderly manner and remove hurdles to full employment” TUCP’s Herrera said.
According to the Philippine Statistics Authority, as of January 2014, 10.07 million able-bodied Filipinos in the labor force were either totally jobless (2.969 million unemployed), or had little work and were desperately looking for additional work and income (7.101 million underemployed).
Although the last reported official unemployment rate was 7.5 percent as of January, a separate survey by the Social Weather Stations showed that a total of 12.1 million individuals were completely without work in the last quarter of 2013, pointing to a much higher jobless rate of 27.5 percent.
Citing a study by the National Competitiveness Council, Herrera said the country has to create 3 million to 4 million new jobs every year over the next five years, to bridge the unemployment gap and bring the nation to newly industrialized status.
“Jobs provide people with incomes that enable them to buy goods and services or to save. The increase in consumption stimulates the market, builds up the economy and provides additional revenue for government. And the accumulation of savings provides more funds for investment,” Herrera said.
He said the government needs to take the lead in creating jobs and proposed a national employment plan that would compel every agency and state-owned firm to carry out more labor-intensive projects.
The president of the Philippine Economic Society said the current growth in the gross domestic product is not enough to create the needed jobs.
“Job creation in the last two years was not enough to cover the average graduates in March of about 500,000,” said Alvin P. Ang, a professor of economics at the University of Sto. Tomas.
Ang said data showed that there is a large number of unfilled positions in several industries, but these are not filled because of the quality of the applicants and their desire for higher salaries.
The ability of the educational system to respond to industry demand is also inelastic in the short term, he said.
Also on Wednesday, Vice President Jejomar Binay acknowledged the role of migrant Filipino workers in driving economic growth, and urged the government to repay them by strengthening the labor force.
“It is only fitting that the government repays their sacrifices with the commitment to empower our labor force with the means to access and enjoy the benefits of our economic expansion,” Binay said. – With Sara Susanne D. Fabunan, PNA
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