Have you ever wondered, of the total number of employed individuals in the Philippines, what is the percentage of minimum wage earners? Let’s include those earning less than the minimum, what will the figures be?
Ever wondered how many employees were celebrating everytime they know that a new wage order has been passed increasing the minimum wage rate and how may of them are frustrated knowing that such increase is just “n%” of their current salary and didn’t even feel that there is an increase at all?
Philippine Minimum Wage Earners Statistics
I’ve searched the internet but I couldn’t find any statistics of minimum wage earners. I bet if we will use the internet to survey the statistics of minimum wage earners in the Philippines, it will somehow be a misrepresentation because most of them have blue collar jobs but, we’ll try to see what we can get.
Please participate in the survey below for us to find out:
Help us gather information. Share this form: https://docs.google.com/forms/d/1vMabYETAc7RhLp5vkDDTvCrzmckhKXxTaRi58qZ4_iU/viewform
Based on the latest results of the survey, 73% are minimum wage eaners and 27% are earning more than minimum. Keep answers coming! 😉
Wage Rate of Minimum Wage Earners
Just recently, the Regional Tripartite Wage and Productivity Board of the National Capital Region (RTWPB-NCR) has approved a P10 increase in the minimum wage in Metro Manila. Upon effectivity of such increase, the minimum wage rate in Metro Manila will be P466 consisting of P436 basic wage and P30 cost of living allowance (COLA). P15 of the P30 COLA will be integrated to the basic wage on January 1, 2014.
For all other parts of the country, please refer to this tables:
Tax on Compensation of Minimum Wage Earners
Minimum wage earners are exempt from income tax. That is not totally true.
Minimum wage earners can be exempt from income tax and consequently from withholding tax if the taxpayer has no other source income but his or her compensation from being employed. And yes, even 13th month pay, hazard pay, overtime pay, and night differential pay are exempt from income tax.
The not-so-good side of it is when you compare an employee earning above minimum by, let’s just say, P1,000 with no overtime work versus an employee earning minimum wage with overtime work, the minimum wage earner will obviously get a higher take-home pay that the employee earning above minimum, contributed to that was the tax withheld from the latter.
There may be additional compensation being given to the minimum wage earners such as commissions, honoraria, fringe benefits, benefits in excess of the allowable statutory amount of P30,000.00, taxable allowances and other taxable income other than the statutory minimum wage, holiday pay, overtime pay, hazard pay and night shift differential pay. These employees shall not enjoy the privilege of being a minimum wage earner and, therefore, his/her entire earnings are not exempt from income tax and, consequently, from withholding tax.
Spending Pattern of Minimum Wage Earners
What can a minimum wage actually buy? How are minimum wage earners saving and spending their take-home pay?
Maybe we need to categorize differentiate those:
- With other source of income or no other source of income
- With own house and car or no own house and car
- With dependents or without dependents
- Generally allowed to work overtime or generally not allowed
- Into savings or into spending
In addition, factors such as distance from work, prices of goods and services in work and at home, quality of goods and services and other personal preferences are affecting the way minimum wage earners spend.
In general, minimum wage earner spend for the basic needs, no more no less. As minimum wage earners belongs to Class “C” and lower social class, it is expected that they are earning to live unless they have other sources of income, have their own house and car, have no dependents to feed, usually have paid overtime work and are maintaining their savings.
If you have other source of income, you might be a minimum wage earner being an employee but you earn additional bucks to spend for your needs. Some get part-time jobs commonly called “sideline”, do online job or money making using the internet, put up their own “sari-sari” stores and the like.
Sometimes even a minimum wage earner have their own house and car, especially those that are home-grown. They may have acquired these through inheritance, gift or even acquired out of savings. This puts someone in advantage because no rent needs to be paid and commuting will not waste their time. The cons probably is the costs of maintenance.
Obviously, if you don’t have dependents to feed or support, your savings is all yours.
Some company do not encourage their employee to work overtime. For these companies, working overtime strictly requires approval as they need to operate within budget. For those companies however that prioritizes continuity of work or production, they are into overtime and allow their employees to work in an extended time. If a minimum wage earner has no other source of income, it is a big help for them to have an overtime work as it increase their take-home pay and their purchasing power.
When people save, they spend less. That is why those who are into savings have less necessities in mind because they are planning for their future. Self-discipline is a must for someone who wants to save despite of earning minimum. Luxuries like high-tech gadgets, ipad, iphone and other “in” smartphones are not their priority.
Social Activities of Minimum Wage Earners
This topic is very much subjective and we really cannot generalize but at least, based on the spending pattern, we can say that it make sense that minimum wage earners really have this kind of social life.
- Depending on the proximity to shopping centers and considering other expenses, minimum wage earners in the Philippines generally meet with friends once a month, for those highly sociable individual. Some others with “alcoholic” habit, do drink, and get drunk with their friends one a week.
- Minimum wage earners often times choose to stay at home after work to watch television shows rather than strolling over the metro, as they are most likely saving their money.
- Even if earning and saving money is a struggle, minimum wage earners in white collar stay updated with their social networking accounts.
- Both white collar and blue collar minimum wage earners find it interesting to go unli-call or unli-text with their friends, relatives and strangers. Texting and calling is actually one thing common to all Filipinos.
- Most minimum wage earners find it more practical to go to malls and amusement park to stroll and eat in fast foods that to go shopping, obviously.
It would require an extensive study and observation to really know the general attitude of minimum wage earners because their personality becomes the ultimate deciding factor. However, the restrictions in financial availability left them no choice but to really decrease spending on luxury and focus spending on the basic needs.
Share us your thoughts regarding this topic. 🙂