Current minimum wage still not enough to meet family needs —IBON

Minimum wages across the 17 regions of the Philippines are still not enough to meet a typical family of five’s needs to cover food and non-food costs as of March this year, despite the implemented increases, according to data released by economic think tank IBON Foundation.

Data collated by IBON showed the national average daily minimum wage in March stood at P440 while the family living wage—computed using the National Wages and Productivity Commission’s (NWPC) minimum wage data and March 2024 inflation data from the Philippine Statistics Authority—averaged at P1,207, resulting in a national wage gap of P762.

The NWPC defines the family living wage as the income needed to provide for the cost of living, which includes all food and non-food requirements, with sufficient allowance for savings and investments for social security.

In the National Capital Region, the daily minimum wage stands at P610 —the highest in the country— up from P460 as of April 2023.

However, the family living wage in Metro Manila also increased to P1,197 from P1,160 in April 2023.

The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) has the lowest daily minimum wage in the country at P361, while the family living wage in the region stands at P2,053—creating the highest wage gap across all regions at P1,692.

The minimum wage in BARMM has already jumped from P341 since April last year.

In Region IV-A or Calabarzon, the daily minimum wage was hiked to P520 versus the P470 daily minimum wage as of April last year.

While the minimum wage in Calabarzon increased, the required family living wage in the region also rose to P1,123 from P1,082.

In 2023, inflation —which measures the rate of increase in goods and services— averaged 6%, while the national daily minimum wage only increased by 7.6% year-on-year.

IBON executive director Sonny Africa told GMA News Online that the think tank’s study “confirms that minimum wages in virtually all regions are lower today than 35 years ago, in 1989, when the shift to regionalization from a national minimum wage began.”

“The real value of the average minimum wage across all regions is 26% less today than in 1989. The real value fell in 16 regions, with the biggest fall at 52% in BARMM, and the only region with an increase was NCR with just a measly 0.3%,” Africa said.

He said that the wage gap has been growing wider since 1989 because “the wage increases of regional wage boards are so infrequent and so small that worker wages aren't keeping up with inflation, nor even with increasing productivity.”

Africa said a “large legislated wage hike” will give immediate relief, start to correct decades of wage regression, and make economic growth and the economy much more inclusive.

“Without meaningful wage hikes, reportedly increasing employment just means increasing poorly-paid work and working poor rather than real gainful employment,” he said.

The government’s economic managers have since raised alarm over the proposed legislated national wage hike, pointing to its inflationary impact as well as its effect on micro, small, and medium businesses that are still recovering from the COVID-19 pandemic.

National Economic and Development Authority Secretary Arsenio Balisacan had said that “we wanted the wages to rise, but we would want it to be a tripartite decision among firms, labor, and, you know, the government across the regions of the country.” — VBL, GMA Integrated News