W. Visayas workers struggled with ‘shrinkflation’ in 2023 – labor group

By Rjay Zuriaga Castor

Throughout the entire year, workers in Western Visayas grapple with a decrease in the quantity or availability of goods and services and a decline in the purchasing power of their wages — a situation described by the labor sector as “shrinkflation.”

According to the Iloilo chapter of the labor group Partido Manggagawa (PM), the “cost of living crisis in the country is manifested, on one hand, in the deflation of real wages and, on the other hand, in the shrinkflation of commodities.”

With the upcoming holidays, the labor group stressed that workers in the region are reeling from the shrinking availability of products and the diminishing value of wages.

The headline inflation, or the rate of rising prices of goods and services in the region, peaked in February at 10.8 percent — the highest inflation rate among all regions in the country for that month.

The inflation rate in the region started its surge in November 2022 with 9.6 percent, followed by December with 10.5 percent, and January 2023 with 10.3 percent.

The region’s headline inflation then eased for five straight months starting in March.

The inflation’s cooldown was disrupted when August inflation slightly increased to 6.1 percent from 5.5 percent in July. The surge continued to 6.6 percent in November.

The average inflation in Western Visayas from January to November 2023 is at 7.2 percent, according to the Philippine Statistics Authority (PSA).

Aside from the high inflation rate that confronted workers in the region, PM-Iloilo also pointed out the “equivalent real wages [that] remain depressed.”

“The P30 hike in Western Visayas raised [the] nominal wage to P450, but the equivalent real wage is only P360. That is, P450 in 2023 can only buy the equivalent of P360 in 2018, or a gap of P90,” said Mario Andon, PM-Iloilo spokesperson.

PM-Iloilo was referring to the wage order issued by the Regional Tripartite Wages and Productivity Board in May 2022. The wage hike took effect on June 5, 2022.

A nominal wage, also called a money wage, is the total amount of money a person earns. On the other hand, a real wage is a wage adjusted for inflation.

On November 16 this year, minimum wage earners in the Western Visayas received a P30 increase in their daily take-home pay. The pay hike was issued by virtue of a petition of two labor groups.

The new wage order has benefited employees in non-agricultural, industrial, and commercial establishments, as well as domestic workers.

The minimum wage in Western Visayas for non-agricultural establishments with more than 10 workers increased to P480, while P450 for non-agricultural businesses with 10 workers or fewer, and P440 for workers in agriculture.

Domestic workers also received an increase of P500 in their monthly salary, raising it to P5,000 in a month.

Progressive groups in the region, and even individual workers interviewed by Daily Guardian, said the wage hike is “not enough.”

The PM has also criticized the P30 hike calling it as “too little, too late.”

Andon said that the wage increase failed to meet the demand for a P100 wage recovery, noting that labor workers in the region are still owed of P97.

“Sa kabila ng increase, ang tunay na halaga (real wage) ng minimum wage ngayon ay P383 lamang batay sa 2018 na base year ng inflation. Ibig sabihin, may utang pang P97 ang mga kapitalista at ang gobyerno sa mga manggagawa para mabawi ang nawalang halaga ng sahod,” Andon said.

The P97 loss in purchasing power is the difference in the nominal wage of P480 and the real wage of P383.

Prior to the issuance of the new wage order, labor groups in the region had called for a “P100 wage recovery” on the daily salary.

The wage recovery they are seeking is to patch up the losses workers incurred due to the increasing prices of basic goods and primary commodities and the weakening of the peso’s purchasing power this year.

“The minimum wage adjustments were a belated response from the government to organized labor’s demand for salary increases since last year […] The wage orders from the different regional wage boards then fell short of the wage recovery demand. Expectedly, real wages stayed deflated despite the latest round of minimum wage hikes,” the labor group furthered.

Despite the wage hike, PM-Iloilo highlighted that the rate of rising prices of goods and services in the region creates a disparity between the nominal and real wages of the workers.

“Wage hikes have not kept up with the rise in prices and so workers’ purchasing power has been depleted,” it said.

According to the PSA, one peso in 2018 is worth 79 centavos only in November 2023 in Western Visayas.

The PM said these circumstances emphasized the “necessity for Congress to plug the gap by enacting the bill for a P150 salary increase.”

In March 2023, Senate President Juan Miguel Zubiri filed Senate Bill 2002, or the Across-the-Board Wage Increase Act of 2023 that seeks a pay increase of P150 nationwide.

“Shrinkflation is just one problem facing workers and the poor,” the labor group added.