Econoynoying: Malacanang math on wage hike erroneous
In an attempt to undermine calls to increase wages amidst rising commodity prices, the President, through Malacanang spokespersons,presented data indicating that a P125 across the board increase in daily wages will cost the economy an astonishing P1,605,500,000 trillion (maybe they meant P1.6 trillion instead of billion trillion?), which, with an economy of according to them about P8.5 trillion to P9 trillion, “will not be practicable.”
Valte backed up her claim with some math wizardry:
P125 x 26 days x 13 months = P42,250
P42,250 x 38 million (labor workforce) = P1.6 trillion
We can only imagine how proud Abigail Valte and her team of twitterers and googlers are of themselves for coming up with such a stunning number. If true, this would have delivered a blow to the arguments of those for wage increase, and more importantly, would have pleased their boss immensely.
There is a slight problem though — their data is wrong. Malacanang, it seems, have been too busy with propaganda that they have forgotten simple logic ang math. That, or they intentionally fed media with false data hoping that no one will notice.
Unfortunately for them, the proponents of wage hike aren’t so fond of noynoying like they are.
In his column, Dr. Giovanni Tapang of Agham, breaks it down for the math magicians in the Palace.
For one, it should be pointed out that P1.6 billion trillion (or sextillion) doesn’t make sense.
But ok, let’s assume they actually meant P1.6 trillion, it still won’t figure. They apparently got the 38 million from the January 2012 Labor Force Survey which is the number of the entire labor force. They got too excited and forgot to check that only 41% of this or 15.56 million are from private establishments and are thus covered by the P125 wage hike proposal.
If we try Valte’s formula using this figure, we’ll get only P0.657 trillion. Not as scary, huh?
But let’s take it a bit further.
Malacanang is trying (desperately) to prove that the economy and the business sector won’t afford a significant wage hike. But research group Ibon Foundation points out that business actually has more than enough profits to support a wage hike. They said that the proposed P125 increase will still leave corporations with P1.435 trillion in profits and will cut profits by a mere 12-percent.
Moreover, it has been indeed “more fun” for the country’s top 1,000 corporations, which combined annual net income increased from P116.4 billion in 2001 to P804.1 billion in 2010, or a cumulative P4.593 trillion over the decade 2001-2010.
This is in stark contrast to the situation of the nation’s workers whose real value of wages actually fell by P24 or 11% from 2001-2011, considering inflation.
Ibon and other groups have repeatedly pointed out that the alarmist scenarios of runaway inflation and massive job losses are baseless. In fact, a significant wage hike may actually give the economy a boost as the transfer of money from rich to poor households will increase aggregate demand. Ibon notes that high-income households have the propensity to save while low-income households tend to consume, which will stimulate the economy.
What was that again you said about critics Mr. President?
How do you show the truth to people who do not want to see? How do you make people listen to you if they do not want to listen?
Exactly our thoughts. None is as blind as he who refuses to see, who manipulates data, or is noynoying. Or in this case, Econoynoying.
It all adds up. The President’s recycled arguments against wage increase shows clearly his bias for big foreign businesses and the elite few which has appointed him as spokesperson and implementor of policies which enable them to rake high profits at the expense of workers.
In this case, the mathematics can easily be corrected but Aquino’s corrupt, pro-foreign, anti-people formula will take more than recomputations to repair.
Written for BlogWatch