Wage earners, small store owners benefit economically from higher wages, group says

Unlike in businesses where income is retained by employers either for reinvestment as capital or as profit to sustain lavish lifestyles, workers’ wages are circulated directly into the local economy, thus bolstering the income of neighborhood stores, as noted in a recent report published by a leading newspaper.

This statement comes from Partido Manggagawa (PM), which, in collaboration with the Nagkaisa! Labor Coalition, continues to advocate for the passage of wage hike bills of P100 and more in both Houses of Congress, despite persistent opposition from the Employers Confederation of the Philippines (ECOP).

Today, the Senate is on the verge of passing the P100 increase in minimum wage on its third and final reading, while the Lower House has yet to take action on the pending wage hikes of P150 and P750 for workers in the private sector, as well as the P33,000 entry-level monthly salary for public sector workers.

The more than P8 billion in sales generated by neighborhood sari-sari stores in 2023, as reported by analytics group Packworks, “reinforces our claim that a uniform increase in the national minimum wage would neither harm microenterprises nor lead to massive unemployment,” said PM-Iloilo spokesperson Mario Andon.

He added that this report also counters ECOP’s ‘catastrophe’ scenario for small businesses should minimum wages increase by P100, or more.

“On the contrary, Packworks’ analytical research has shown escalating sales transactions between neighborhoods from 2022 to 2023, coinciding with slight adjustments in minimum wages ordered by the regional wage boards during that period,” Andon stated.

The report also found no correlation between inflation and the sales trend in sari-sari stores, further refuting ECOP’s sensational ‘wage hike = high inflation’ argument. Inflation decreased to 2.8% in January 2024 from 8.7% in January 2023, according to official statistics reported by the Philippine Statistics Authority (PSA).

Given this positive trend, Andon expects a further increase in sales transactions for Aleng Nenas following significant wage increases, citing an earlier study that showed 94% of consumers heavily depend on neighborhood stores for their retail needs.

With approximately 1.3 million sari-sari stores nationwide, 75% of which are owned by women, these establishments are crucial for sustaining local economies.

Andon highlighted the symbiotic relationship between workers and sari-sari stores.

He noted, “Workers often engage in ‘utang-bayad-utang-bayad’ (borrow-pay-borrow-pay) transactions with their Aleng Nenas. Thus, their capacity to pay and purchase more directly impacts the viability and sustainability of neighborhood stores.”

In essence, Andon explained, “In the absence of regular support from the government, it becomes more evident that the transfer of income from the wages of formal labor sustains the sari-sari stores, and consequently, the self-employment of Aleng Nena in the informal economy.”

Andon concluded by reaffirming the labor movement’s position that legislated wage increases of P100 or more are not only justified but also beneficial to the national economy.

He called for an end to the fear-mongering tactics used by the Employers Confederation of the Philippines (ECOP).