The Problem of Just Wage

WORK
is said to be for the purpose of obtaining
economic gain for the laborer and is
directed to the promotion of life.

COMPENSATION
 It is the essence of work.
 It can be in the form of wages, shares on profit, harvest
or commercial goods, in-kind payments, and other
remunerative fringe benefits.
 Its main objective is to create a system of reward that
is equitable to the employer and employee.
 The general concern is that justice should be a
substance of compensation.

Types of
Wages
Family
Wage
Living
Wages
Minimum
Wage
JustWage
Real
Wages
Nominal
Wages

Real
Wages Measured in terms of
actual purchasing power
(inflation).
 Real wages show the
value of wages adjusted
for inflation.

Nominal Wages
 measured in terms of money
paid, not in purchasing power.
 A nominal wage is the rate of
pay employees are
compensated. If you're paid
$15.00 per hour, your nominal
wage is $15.00 per hour.

Family Wage
the amount of money that
the worker needs to
provide for the needs of
the family.

Living Wages
■ minimum hourly wage
necessary for a person to
achieve some specific
standard of living.
■ The goal of a living wage is
to allow employees to earn
enough income for a
satisfactory standard of
living and to prevent them
from falling into poverty

Minimum
Wage The minimum rate a worker can
legally be paid as set by the statute
or government.
 Minimum Wages in Philippines is
expected to be 537.00 PHP/day by
the end of this quarter, according to
Trading Economics global macro
models and analysts expectations.
 In the long-term, the Philippines
Daily Minimum Wages is projected
to trend around 590.00 PHP/day in
2020.
R.A 6727
(Wage Rationalization Act)

Just Wages
■ The remuneration which
is enough to support the
wage-earner in
reasonable and frugal
comfort

THE TEACHINGS OF THE
CATHOLIC CHURCH ON
WAGES

Rerum Novarum
■ Also known as the Capital and Labor,
■ Pope Leo XIII wrote, “Members of the
working classes are citizens by nature
and has the same rights as the rich.”
■ It is one of the most impassioned
treatises ever written by a pope on the
sacredness of work and the dignity of
the working person. Pope John XXIII
rightly called it the “Magna Carta for
Social Reconstruction.”

Quadragesimo Anno
(On the Reconstruction of the Social Order)
■ An encyclical written by Pope Pius XI
that advocated the minimum wage.
■ He introduced profit sharing and
giving workers a say in a company’s
management.
■ He insisted that heads of families
should receive a wage sufficient
enough to meet the “ordinary” family
needs. From this, he developed the
concept of “family wage”.

Mater et Magistra (“Mother and Teacher”)
■ Popes John XXIII and Paul VI
advanced the church’s teachings
on economic justice.
■ Writing Mater et Magistra in
1961 called on governments to
reign in business abuses and to
press for full employment
policies.

Laborem Exercens
■ Issued by Pope John Paul II in 1981,
this encyclical letter which offered a
detailed assessment of what
constitutes just compensation,
declaring that workers have
“fundamental rights” to health-care
insurance, suitable working
conditions and rest periods. The
disabled he says, “should receive job
training, and migrant workers should
have special protections.”

Centesimus Annus
■ Pope John Paul II stated that
“Society and State must ensure wage
levels adequate for the maintenance
of the worker and his family,
including a certain amount for
savings.”
■ The right to a “just wage”, which
cannot be left to the “free consent of
the parties, so that the employer,
having paid what was agreed upon,
has done his part and seemingly is
not called upon to do anything

Catholic Bishop’s Conference of the
Philippines (CBCP): On Social Justice
■ The remuneration for work should
guarantee man the opportunity to provide
a dignified livelihood for himself and his
family on the material, social, cultural,
and spiritual level, taking into account the
role and productivity of each, the state of
business, and the common good.
■ Workers deserve a “family wage not in
charity merely, but as duty to social
justice.”

THE ISSUE OF JUST WAGE
AS DISCUSSED BY OTHER
AGENCIES

• The 1948 Universal Declaration of
Human Rights protects the basic
rights of the workers, more
specifically:
“The right to work, to free
choice of employment, to
just and favorable conditions
of work, and to protection
against unemployment and
the right to equal pay for
equal work.”

 The 1966 International Convention on
Economic, Social and Cultural Rights
states in Article 7:
“The right to fair
wages and equal
remuneration for work
of equal value.”

 International Labor Office
Conventions has adopted ILO
Convention No. 100:
“Equal pay for men
and women
workers.”

PHILIPPINE
CONSTITUTION AND
REPUBLIC ACT 6727

Philippine Constitution and Republic Act
6727
“The workers are entitled to a living
wage.”
The Wage Rationalization Act declared the policy of the
state to rationalize the fixing of minimum wages and to
promote productivity-improvement and gain-sharing
scheme to ensure a decent standard of living for the
workers and their families.

Government Agencies Involved
National Wage and
Productivity Commission
(NWPC)
Regional Tripartite
Wages and Productivity
Boards (RTWPB)
 They handle the minimum wage for Filipino
Workers of each and every region of the country.
 It is their duty that wage shall be as nearly
adequate as is economically feasible to maintain
the minimum standards of living necessary for the
health, efficiency and general well being of the
workers.

FACTORS TO CONSIDER IN
THE FORMULATION OF
FAIR WAGES

1. External Market Factors
■ Refers to the supply and demand for labor and
the economic conditions and underemployment.
Wages are relatively high if there is scarce supply
of labor, and the same is low if there are more
opportunities for labor.

2. Laws and Regulation
■ Workers should be paid in accordance with laws and
regulations issued by the government. It requires
that employers pay at least the minimum wage.
3. Cost of Living hg
■ Relates to basic maintenance needs and it must be
seriously considered in the formulation of wages. A
fair wage should be sufficient to meet the increase
in cost of living.

4. Prevailing Industry Rate
■ Some claim that paying workers the average of
what other companies are paying for the same
job results in a fair wage but not all companies
have a minimum wage high enough to maintain
a decent standard of living.

5. Organizational Factors
■ Assessment on what type of industry the organization
operates, the size of the company and the
organization’s profitability to justify its ability to
provide fair wages to its workers should be
considered.
h6. Job Factors g
■ The nature of the job itself entails the formulation of
a just wage. Duties, responsibilities and the skill
requirements of the job are probably the most
considerable determinants of fair wage.

7. Individual Performances
■ Individual performances or productivity ratings
affect the determination of wage/salary
increases. One who performs well in his job
deserves to receive a proportionate increase in
pay.

 The minimum wage mandated by the
government is not a guarantee of a just and fair

■ Organizations and businesses usually
conclude that they are legally and morally
right when they fulfill their “mutual
agreement” with the employees. It is objected
that the mutually agreed upon wages may not
be advantageous to the workers.

 Geographic differences hinder the
formulation of a perfectly common definition
of fair wage. Some communities have a
higher cost of living than others.

■ Wage indexation to cost of living, where wage
is automatically adjusted with the increases of
cost of living, is not usually met by majority of
the employers. One valid reason is the
organization’s insufficient financial resources
for the obvious fact that they too are
unfavorably affected by such economic
fluctuations.

■ Companies have different interpretations of
the justifiable pay for certain job positions,
skills and tasks. Thus, the prevailing
industry rate alone could not perfectly
establish a just wage.

■ The Law of Supply and Demand on labor, e.g.,
the more the supply of labor the less the
compensation given to workers.

■ As one of the major economic condition
indicators, the inflation rate also dictates the
formulation of just wages as it affects the prices

The Problem of Just Wage

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The Problem of Just Wage