EDITORIAL: Too Tired for Two-Tiered*

June 4, 2013

On May 15, 2012 the Regional Tripartite Wage and Productivity Board (RTWPB) of the Department of Labor and Employment (DOLE) issued Wage Order No. 15, altering the prevailing wage system in the CALABARZON industrial corridor in Southern Luzon.

This was followed by similar issuances for Metro Manila and other regions in the country. The wage orders provide for the implementation of a two-tiered wage system in 2013.

What is the two-tiered wage system?

The first tier is based on the poverty threshold set by the government per region. The second tier is a “productivity” wage where a company may give incentives to workers who meet their productivity standards. The first is mandatory; the second is voluntary.

What does this mean for workers? Cutting through the linguistic labyrinth of the wage orders, workers’ daily minimum wages– already way too meager for the skyrocketing costs of living in the country — will be slashed by almost half under the new wage system.

In CALABARZON, for example, where the law mandates P337 and P426 as the minimum wage depending on the company’s location, the two-tier wage system reduces the amount to P259 per day, or a reduction of between 23-40%.

For workers in the Ilocos Region, the wage will be pegged at P205-P253, depending on the industry category. Wage rates under the prior system was P200-248, with a seeming increase that will not, however, be increased for the next three to five years, under the new system.

A Machiavellian move was the government‘s approval of a total of P30 increase in the Cost-of-Living Allowance, to be integrated into the basic minimum wage of Metro Manila workers. Machiavellian, as the region is a strategic location for the country’s national politics, and where the leadership of organized labor movement is largely based. The new
wage system is being implemented on a piecemeal, if not surreptitious basis, to obfuscate concerted action on the

How the Aquino presidency that ran on a campaign platform of serving its “boss” – the Filipino people, of which workers constitute the second biggest number– could even think of implementing such scheme at a time of global uncertainty, and excruciating poverty in the country, is beyond comprehension.

The labor movement in the country has long been clamoring for a substantial wage increase. Their fight for higher wages have already been made difficult by the abolition of a national minimum wage through the Wage Rationalization Act issued by Aquino’s late mother, former president Corazon C. Aquino.

Moreover, studies have shown that only around 10% of establishments in the country actually implement the legally-mandated wage rates, with workers in small establishments usually receiving, in reality, much less. Contractualization has also made it easier for companies to circumvent their responsibilities to their workers. We here do not even speak yet of the real value of wages, which has substantially declined through the years as a result of the spiraling rate of inflation.

Where then is the dignity of human labor here?

The two-tier wage system purportedly considers the plight of workers, but actually constitutes the sharpest attack yet on workers’ wages in the history of the labor movement in the country. This new wage system takes the modern-day slavery of workers to further wretched levels. It is an immoral law that relegates workers’ conditions only an inch above that of the slaves of classical antiquity.

The first tier is a state-sanctioned thievery of half of what workers should already own according to law, though pitiably meager, has been won only through decades of hard struggle. The second tier or “productivity” wage will only worsen the already dehumanizing labor conditions in many industries in the country.

It shall squeeze the last of the ordinary worker’s strength as he or she strives to meet company demands in order to raise half of what used to be his/her wage. It will render workers too busy to organize and demand for higher wages, safe working conditions, and job security, something that capitalists look forward to. Its voluntary nature also emasculates labor’s collective bargaining power while using sugar-coated language providing for labor “representation” in the company’s productivity committee when the same law itself allows the company the freedom to set up the committee, or not.

The two-tier wage system is no doubt part of the Aquino government’s adherence to the neoliberal policy of unbridled freedom for the pursuit capitalist profit, now the subject of people’s protests globally, due to the excruciating adverse effects on peoples, especially the working and middle classes, everywhere.

What needs to be done?

There is simply no basis for the implementation of this illegal and utterly unjust wage system.

The two-tiered wage system violates the constitutional guarantee for workers’ rights to decent and fair wage. It is also illegal, as mere government agencies arrogated upon themselves the power to modify a law that is a process that requires congressional approval.

This cannot be acceptable to workers, and those who respect labor rights and believe in the dignity of human labor must stand up in unity with workers against this two-tiered wage system. Our righteous anger will bring us nowhere without unity.

We must call for the immediate repeal of these wage orders and hold accountable President Aquino and his minions in the labor department for this blatantly anti-worker law.

*This is the editorial of the CBBRC Update July- December 2012 issue. To download the whole issue, please go to