Weakening the workers' bargaining leverage

BACKBENCHER
Rod Kapunan
7/9-10/2011



It may surprise many, but the adoption of minimum wage greatly weakened the workers' bargaining leverage to obtain a reasonable market value for their labor. It is surprising, but that's the way it is. Instead of having the incentive to unite to demand for an equitable amount of wage, the imposition of minimum or regulated wage automatically deprived them the inertia to form or join labor unions.

It pre-empted labor unions of their sacred role to demand for higher wages. In fact, as far as unions are concerned there is no amount of wage that is satisfactory to the workers. Be it given by the State or obtained through collective bargaining negotiations, the amount would always be short of what is called living wage. For them to say otherwise is to deprive themselves of the logical reason for their avowed existence.

The other side of it is it automatically relieves the employers the tension that builds up between them and their employees.

So, for all of the unions' harsh criticisms that the current amount of wage is insufficient, it created a situation where it is the State that now bargains for them. The new minimum wage may not be that much, but is enough to weaken the will to demand.

Although numerous surveys on wages have been conducted, not one has ever come out to determine why a number of workers already employed would not want to join the union. Surely, the survey would shock many, but as of April 2009, the country has a total of 34,320 registered labor unions representing a total membership of 2.6 million. Yet, for the same year, the Department of Labor and Employment stated that the country had a total labor force of 36.8 million. As of 2011 that figure has increased to 38.9 million. Hence, if we are to base our figure on the 2009 data then only 7.06 percent represent the unionized workers in this country.

That dismal figure now exposes the truth how trade unionism has lost much of its appeal, and their failure is precisely because workers already receiving the minimum wage are fairly satisfied, and would not want to lose their job by joining unions that have been losing much of their potency. Even if we assume further that of the present 38.9 million Filipino workers only about 30 percent are receiving the minimum wage, which is about 12.9 million, still that would not suffice to explain why only about 2.6 million are registered as union members.

Ramifying further, if we could safely assume that 2.6 million are registered union members, maybe more that 50 percent of them would not risk go on strike just to demand a wage increase knowing that more than 70 percent of the strikes in this country end up with the strikers losing their job. In effect, the 1.3 million union members are not likely to go on strike just to demand for an across-the-board increase and for more benefits beyond that given by the Labor Code.

Their noticeable passivity to engage in a collective and concerted action now sustains our assertion that the country's blue collar workers are rather overpaid. To clarify ourselves, if those receiving P426 a day are not satisfied, then most likely they would join the union, and even risk joining a strike just to achieve their demands. Rather, many of the strikes we see today are considered defensive strikes, like illegal termination, retrenchment, union busting or violation of the existing CBA. If so, then the 1.3 million is likely to dwindle further to below one million to 500,000 workers mostly militant trade union members.

For the estimated 70 percent or 26 million workers receiving below the minimum wage, surely they have a more urgent reason in joining a union. However, that is not the case. Employers paying 25 percent less of the current minimum wage would insist the amount stand as the real market value of labor, while to most workers that amount is fairly better than nothing, much better than farming! But what makes it unfair is that the system of minimum wage made payment below that amount illegal.

Invariably, even if they would go on strike to demand compliance, they cannot because companies violating the wage law are 100 percent non-unionized, they being casuals or supplied by labor-only contractors. Effectively, the 92.94 percent of the workers in non-unionized companies are deprived of their right to strike because of the prerequisite that unions has to be registered with the Department of Labor, and must stand as the recognized collective bargaining agent of the workers in a given establishment. Wildcat strike is no longer legal in our present jurisprudence.

This now answers the question: Why rock the boat that would result in them losing their employment or kill the goose the lays the golden egg if such would result in the closure or relocation of the company? The minimum wage of P426 daily or equivalent to $9.79 is not much, but taking into account our unemployment rate of 7.3 percent and an underemployed of about 19.7 percent as of 2010, that factor now puts a decisive edge to the continued relevance of trade unionism.

Compounded by the high cost of minimum wage that does not tally with our per capita income of $3,890,188 as of 2011, employers' worst fear could happen once their employees become permanent and later form their own union. Their cost per employee could dramatically soar three times their current cost, and it was this fear that opened the Pandora's Box to labor-only contracting. For agency-supplied employers to pay an extra cost would still be a cheaper option than if there is a union demanding every now and then a wage adjustment and threatening to go on strike once their demand is not met.

It is this fact why many of our employed blue collar workers now rely on the government to bargain for them believing it would not allow a situation where their income could dip to starvation level. Since the increase is of general application, it thus resulted in the losing of their steam to bargain collectively.

• rodkap@yahoo.com.ph