Saturday, October 01, 2011

PHL’s minimum-wage level fuels ‘brain drain,’ says NWPC’s Lagunzad

Thursday, 29 September 2011 20:34
Cai U. Ordinario / Reporter 


WHILE minimum wage helps protect low-skilled workers from abusive employers, it leaves most of the country’s technical personnel or skilled workers vulnerable to seeking better opportunities abroad, according to the National Wages and Productivity Commission (NWPC).

At the Communication and News Exchange Forum on Thursday, NWPC Executive Director Ciriaco Lagunzad III said having high minimum wage is one of the explanations to the “missing middle” pertaining to the technical and skilled personnel. 

Lagunzad said currently, minimum wage is already more than 90 percent of the average wage in the country despite the recommended level by the International Labor Organization which is only 70 percent.    
 
“Ngayon halos 90 plus of the average wage is minimum wage. There are times [it)] will exceed your average and that’s very bad [because] it disrupts the whole economy, it doesn’t value skilled workers, [and] it will crowd out collective bargaining. Kaya wala nang unyon kasi umaasa na lahat sa minimum wage eh,” Lagunzad told reporters. 

Ayaw na ng mga workers ng increase kasi ’pag tumaas magbabayad [sila] ng [mataas] tax....Eh di mas mabuti nang minimum na walang tax kesa increasan mo mas malaki yung tax, ’yung take home pay maliit. These policies tend to distort labor markets,” he added. 

Based on the Bureau of Labor and Employment Statistics, the country’s average monthly wage was at P13,565 in 2010. This means, using a six-day work week, an average worker earns P521.73 per day. 

However, data from the NWPC, if this is going to be applied in a region like the National Capital Region where the current minimum wage is P426 per day or an average monthly salary of P11,076, using a six-day work week. 

Lagunzad explained that under this system, many skilled workers are forced to go abroad as overseas Filipino workers because their salaries are very low and with minimum-wage earners not being taxed, low-skilled workers often have bigger take home pays than skilled workers. 

“Kinakailangan lang idisiplina ’yung pag-set ng minimum wage. [Dapat] hindi masyadong mataas kasi kung mataas, bukod sa hindi ma-afford ng business, ’yung mga collective bargaining [agreements] maaring mahirapan kasi mas malaki pa ’yung binibigay ng wage board kesa sa collective-bargaining  agreement. Tapos, ’yung [skilled]...hindi na binibigyan ng halaga.... kasi binibigay naman ng minimum wage ’yung kanilang pangangailangan,”
Lagunzad explained. 

Earlier, the World Economic Forum (WEF) warned that the Philippines is among the developing countries that may experience the highest need for professionals by 2020 and beyond. 

The report titled Global Talent Risk–Seven Responses, done by WEF in collaboration with the Boston Consulting Group, project that there will be talent shortages in 25 countries, 13 industries and nine occupational clusters by 2020 and 2030. 

Talent shortages will be greatest among educated professionals, technicians and managers. Professionals will also be most in demand in trade, transport and communications industries in developing nations

The 13 industries where these shortages will occur by 2020 and beyond are mining, manufacturing, utilities, construction, trade, hotels, transportation and communication, financial intermediation, information technology and business services, public administration and defense, education, health care, and other services

Among developing countries like the Philippines and Malaysia, the highest demand will be for senior managers in mining and utilities; professionals in mining, manufacturing, utilities, trade, and transportation and communication; technicians and associated professionals in mining, trade, hotels, and transportation and communication; clerks in mining and trade; and service workers in manufacturing.

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