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| Cartoonist Zach |
Some people claim to fight for the working class--while refusing to work themselves. Some people claim to fight for the working class--while supporting policies that will prove detrimental to the working class. One of these policies is #SahodItaasPresyoIbaba--meaning to raise salaries and lower prices. I wrote some time ago about why #SahodItaasPresyoIbaba doesn't work. However, I'lm still attacked by Ad Homimens and Nom Sequiturs. How's that even possible anyway? Economics isn't magic! If President Ferdinand "Bongbong" R. Marcos Jr.'s promise of PHP 20.00 kilo rice is absurd--so is the promise of #SahodItaasPresyoIbaba economics!
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| Image by Sabrina Jiang © Investopedia 2020 |
I don't need a PhD in economics to understand cost accounting. The income statement would include salaries as part of the cost. The cost of goods sold includes salaries. Marketing and promotions include salaries. General and administrative would include salaries. Payment for manual labor and administrative labor are salaries. The question is, "Where will people get the money to pay higher salaries?" It would be from the sales and profits. Profits are needed to keep the company going. Profits are needed for the company's growth--which includes raising up salaries of employees (to keep them loyal) or hiring a bigger workforce to meet demands.
#SahodItaasPresyoIbaba will require owners to raise salaries while selling at a loss. It's because the final product is affected by not just the supply chain but also by the production chain. If the cost of utilities increases then, naturally, a product and service will increase as well. The same goes for salaries. It's because the workforce's salary also affects the cost of a product or service. Do people think that a company would want to operate at a loss? Nobody would want to operate at a loss. If a company operates at a loss--it would also mean being unable to pay employees. Unpaid employees create unhappy employees. In turn, a company would need to lay off workers because it can't afford to pay all workers a higher salary.
#SahodItaasPresyoIbaba economics may be confusing revenues for profits (read here). As always, people tend to think that their sales for the day make up the profit. Do they even realize that employees don't get a profit sharing because salaries are part of expenses? Revenues get deducted from the cost of goods sold along with other expenses, which include salaries. The revenues don't make profits. If employers pay an abnormally low salary--employees will be demotivated. If employers pay an abnormally high salary--they have a high risk of losses. Losses would either force companies to lay off workers or even close down businesses. If all businesses follow #SahodItaasPresyoIbaba--you can expect them to either lay off more workers or even close down. If all businesses close down, where will the working class go? Not everyone is capable of being an entrepreneur!
More importantly, how can proponents of #SahodItaasPresyoIbaba claim to help the workers, when they're against FDI? They say FDI is "exploitative" but come on, it's not like as if labor laws aren't around to discourage exploitation. Don't tell me local Filipino businessmen are incapable of exploitation and environmental destruction. They say FDI is "destructive" because they will take the profits with them. Again, that's what they think because they confuse revenues with profits. FDI will increase the demand for labor, which in turn, will cause salaries to rise (read here). If they insist that people should rely solely on Filipino businesses--are they even willing to open employment for the people? That's the question I've repeatedly asked, only to get insults as an answer. In short, those who reply with insults are caught in the corner and are fighting like cornered cats.
Those who claim that #SahodItaasPresyoIbaba will help the working class, aren't using their sensido common, or common sense. They want people to defy even basic economics. How can one truly claim to help the working class, if one supports policies that will ultimately result in businesses shutting down? If they do want to form their own communes (where the workers own the means of production)--can they really make it sustainable without profits?