Informal sector also to gain from wage hike in the formal sector

By admin - Posted on September 8th, 2008
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PRESS RELEASE
08 September 2008

A broad callA broad callThe Ecumenical Institute for Labor Education and Research, Inc. (EILER,Inc.) today said that the informal sector also stands to gain from a substantial wage hike being sought by the labor sector amidst rising prices.

"Giving the workers economic relief through a legislated wage hike will most certainly produce a multiplier effect, a sort of economic stimulus, which will generate sales and maintain tenuous livelihoods in the informal sector," said Anna Leah Escresa, Programs Officer of EILER, Inc., a private labor think-tank.

"The bulk of the informal sector, including micro-entrepreneurs, homebased workers, vendors, small transport operators, petty retailers, non-corporate construction workers and others are maintained by continuous patronage from the formal sector," explained Escresa.

But the constriction in the purchasing power of workers, she said, also had a direct effect on the informal sector. The decline in employment occurred mostly among persons in vulnerable types of employment, according to Bureau of Labor and Statistics (BLES), such as self-employed workers (-685,000) and unpaid family workers (-211,000) most of whom engage in economic activities.

The pauperization of the working class is magnifying poverty at almost all levels. In the NCR alone, the real value of the nominal wage of P382 is only at P240.86 as of July 2008. Poor families according to official government data have gone up from 4 million poor families in 2003 to 4.7 million in 2006.

Only overseas Filipino workers (OFWs) are propping up the livelihood of many Filipinos. Remittances from OFWs which reached $14 billion a year have boosted the local economy amid the slump.

"A legislated wage hike coupled with safety nets on high taxes and oil prices will greatly help in giving immediate relief to workers both in the formal and informal sector," ended Escresa.

About 5.7 million formal sector workers will directly benefit from a P125 legislated wage. On the other hand, informal sector workers total some 16.3 million, according to the April 2008 Labor Force Survey, and will indirectly benefit from a substantial, legislated wage hike.#