Why does it seem that wages here in this republic are disproportional to the standards of living available? I will dissect the supply and demand aspect of labor.
It seems that comparable to other countries, our standards of living seem to be much higher than what our wages afford us. I came to this conclusion based on mlq3's link on the study looking at a kilo of rice and the wages of a janitor in the Philippines, HK, and Singapore. Basically, it comes out that while a janitor will have to work around 30 minutes to earn a kilo of rice in HK or Singapore, a janitor here will have to work around 60 minutes (twice the amount of labor) just to earn the same kilo of rice.
We can replace the wages with the relevant occupation one has (accountant, teacher, engineer) and replace the kilo of rice with some other commodity (rice meal, cellphone, car), and it comes out that we have to work harder here just to gain what our counterparts can earn in a much lesser time frame.
Now it seems that the natural inclination of institutions that demand labor (government, corporations, other organizations) would try to pay for the lowest amount of wages for the best amount of service, or get their bang for the buck. But they wouldn’t want it too low, otherwise it would turn off their potential labor force. Institutions also normally don't take into consideration cost of living, since institutions would assume that the labor supply would have an informal fallback position that won't rely entirely on wages (i.e. family or side jobs/"rackets").
Case in point, when I started looking for a job as an auditor when the empress was about to take her oath at 2001, the offer for honor students would be around P10K per month. This year, I hear an officemate having her younger brother being offered around P10K per month as well, and he's an honor student. Okay, so there was no inflationary effect for more than eight years? At 2001, you could get a cheeseburger value meal at McDonalds for less than P50; nowadays you have to spring almost a P100 for that cheeseburger value meal.
Why do the suppliers of labor put up with this? Because there are so many of us around. Year in and year out, we churn out more and more graduates than these institutions can absorb. Even if the quality of graduates may be fluctuating year on year, one cannot deny that there are more people competing for the limited openings. It's ok if these industries are growing, but they aren't; some are even shrinking. And with our population growth and policy, this surge in labor won't go down in say ten years.
So what we have is a situation where institutions can afford to pay a pittance, since there are more of the supply willing to offer their services at a lower cost. Even a host of us get out of the republic and never come back, there is a much higher replacement rate to keep the wages down. Population growth abroad is declining and even if technologies become more efficient, the human component will still be needed to operate that technology.
Why then don’t the suppliers of labor demand for higher prices for their wages? Because there would always be additional supply of labor that would be willing to work for less than what you earn at the moment. Actually, that 's the same argument why other countries are willing to hire us because we're willing to work for a relative pittance when their own nationals demand a higher wage.
One of the few times that workers rights actually went up from the labor side was during the time of the Bubonic Plague in Europe during the Dark Ages, where because of the severe population cut down at that time (a third to a half of the population were decimated) that noblemen actually had to bargain with the farmers for relatively more favorable working terms just to keep them working for their lands.
So for as long as industry will have limited growth to a given few here; for as long as the population keeps on growing more than the replacement rate; for as long as the population abroad shrinks; for as long as the wages-cost of living ratio is higher outside than in here, we will continue having these small wages and the exodus of our talents.
2 comments:
Balita ko iba na raw ang kalakaran sa auditing firms. mukhang nauubusan sila ng staff dahil maraming nagaabroad na mga senior staff kaya nakakapagdemand ang mga bagong CPA ng medyo mataas na suweldo. :)
Iba naman ang kaso sa nursing. Sa sobrang dami nila, yung mga walang experience na nurse pa ang pinagbabayad para lang magkaexperience!
at least that's a welcome trend; and with the probable increased regulation to come with the financial crunch, there may be more accountants going out and as a result, giving more leverage for CPAs staying here... :)
as for nurses, the diploma mills really went out of control. establishing an artificial and onerous barrier to entry (making them pay to do their jobs!) is really galling.
but speaking of investing in education and trying to earn the ROI through one's job, i wonder when the payback period would be for our educational spending, since wages may only be enough to cover cost of living plus extra, without covering previous educational costs. and this additional cost just to work, when can we recover locally?
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