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Thursday, May 5, 2005
Labour pains


May 1 - Labour Day - is an important date here, and this week's celebration was typical. Thousands of workers gathered in Manila to march in the streets, ask for higher wages and protest at the government's economic policies.

The marches and rallies were peaceful because the participants heeded calls for calm. Of course, the fact that up to 10,000 police officers and soldiers were tensely watching the demonstrators might have had something to do with it.

The government has good reason to be wary of the labour force. Being a worker in the Philippines is a tough job: the minimum wage is 37.5 pesos ($5.42) per hour - not enough to support a family of five. Many workers have little job security, few benefits and are often exploited. One big shopping chain makes it a regular practice to hire only contract workers, laying them all off just short of the time when the law says they should become regular employees.

If you want to hear Filipino business moguls' arteries pop, just say "wage increase" or "organised labour". Many employers claim that the workforce is overpaid, and raising the minimum wage would bring economic ruin. In fact, to hear some, the government could compel them to pay workers in dirt and they would still complain. As you might guess, labour-management relations tend to be adversarial.

All this means that the average worker who is lucky enough to find a job is often exploited, underpaid and abused. But there is a bright side: bad employers are helping the country survive.

They are doing this by driving away millions of Filipinos to seek work in other countries, from where they remit money back to the Philippines. Officially, overseas workers send home something like US$9 billion each year, but this does not include the amounts they send through informal channels such as friends and fellow workers. Those billions are helping to keep the economy afloat, and probably spell the difference between the country surviving and going under.

It will probably never win a Nobel prize, but the economic model to describe what is happening can be described as follows: first, Filipino businesses abuse workers; second, workers go abroad; third, they remit foreign currency to their families in the Philippines; and fourth, the families use the money to buy consumer goods from Filipino businesses, keeping them alive so they can then abuse more workers (back to stage one).

Seen this way, it is clear that the country's employers are fulfilling a crucial role with their anti-labour practices. They should be encouraged not to change their stance. Not that there is any chance of them doing it, anyway. is the premier information resource on Greater China. With a click, you will be able to access information on Business, Markets, Technology and Property in the territory. Bookmark for more insightful and timely updates on Hong Kong, China, Asia and the World. Voted the Best Online newspaper outside the US and brought to you by the South China Morning Post, Hong Kong's premier English language news source.

Published in the South China Morning Post. Copyright (C) 2005. All rights reserved.

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