The conversation on wages is once again in the headlines. Labor groups are demanding for a national minimum wage of P800, way above the current regional rates that range from P255 to P512. (READ: Labor group pushes for wage increase amid higher prices)
The government’s current response is to study the proposals while it closely monitors the prices of basic commodities. Labor Secretary Silvestre Bello III has also emphasized the importance of balancing the interests of labor and management (READ: DOLE to study minimum wage hike).
Although this seems like a logical stance, the conversations still center on the idea of a “minimum,” instead of seriously considering something more sustainable that goes beyond meeting what is “basic.”
It is high time to talk about not just higher wages but just wages that will allow the poorest families to escape the poverty trap.
Minimum wage and living wage
The ideal situation is where the minimum wage is the same as the living wage.
What laborers get from working should not just be enough to afford basic needs that will keep them able to go back to work the next day. A minimum wage supports subsistence and making ends meet, but a living wage enables workers to attain a good life and their valued capabilities.
We believe that workers should have the capacity and freedom to achieve outcomes that they value. If workers value savings, supporting their family, and recreation, the wage they receive should facilitate the achievement of these outcomes.
Thus, the living wage is a specific amount of income that significantly increases meaningful participation in society and a decent quality of life. Ito ang maka-manggagawa, ito ang makatao.
What Filipino workers need
The proposal for a living wage is not new.
Research group IBON Foundation has pegged it at P973/day for a family of 5 and P1,168/day for a family of 6. Our current research supports this proposal and the clamor for higher and just wages.
Using both economic methods and psychological concepts, we attempted to determine a monthly living wage for Filipino workers that considers quality of life and capabilities. We used domains of magandang buhay (good life) derived from a national survey conducted in 2000 by a research team from the University of the Philippines-Diliman led by Lynna Marie SyCip to measure well-being. We also applied the concept of capabilities by Nobel Prize Winner for Economic Sciences Amartya Sen.
Our team, composed of psychologists and an economist, gathered survey data through systematic random sampling from 500 workers from low to middle income communities in Metro Manila.
The dimensions of magandang buhay or a “good life” included the following:
- housing and quality of neighborhood
- employment and quality of working life
- savings, wealth and assets
- social relationships
- leisure and spare time activities
- physical health
- psychological/ mental health and emotional well-being
- religion and spiritual life
- information and knowledge
- government performance
- political participation
Sen’s conceptualization of “capabilities” hinges on the proposition that quality of life needs to be assessed in terms of the activities one values vis-à-vis one’s freedom and capacity to achieve these valued activities.
Monthly living wage
In line with this, our analysis of the data considered what workers perceive as important domains of a “good life” and their perceived freedom to attain quality of life through each domain.
Using generalized linear and nonlinear curves from an actual set of data observations, we tried several functional form specifications – linear, quadratic, cubic, symmetric sigmoidal (logistic), asymmetric sigmoidal (Gompertz) and exponential.
The logistic and Gompertz specifications imply that a monthly living wage stands at P22,799.29 and P22,961.44, respectively.
This means that around P23,000/month is needed for workers to feel capable of achieving quality of life in the 11 valued life domains. This translates to about P885 daily living wage for those working 26 days a month, a little above the P750 to P800 per day that the labor groups are asking for.
As famous statistician and quality management guru William Edwards Deming once said, “In God we trust; all others must bring data.”
Our research is still in its early stage and more evidence through much larger-scale surveys is needed to further support our claims. In the meantime, we ask all stakeholders – labor groups, social scientists, government agencies, lawmakers – to continue the conversation on living wages.
We ask our government to seriously consider increasing the minimum wage now, with the aim of moving toward a decent, just, and humane living wage. – Rappler.com
(Editor’s note: The authors with photos above are Mendiola Teng-Calleja and Donald Jay Bertulfo. Teng-Calleja, PhD, is an Associate Professor at the Psychology Department of Ateneo de Manila University and the Director for OD and HR Solutions of Ateneo CORD. Bertulfo is a graduate student at the University of Philippines-Diliman. The other authors of this piece are Jose Antonio R. Clemente, PhD, Associate Professor at UP Diliman Department of Psychology and Ma. Ligaya Menguito, PhD, faculty member of the Leadership and Human Resource Department at the Ateneo Graduate School of Business. The research described here was funded by the Institute of Philippine Culture, Ateneo de Manila University. The opinions in this article do not represent the position of their institutions.)