Skip to main content

#SahodItaasPresyoIbaba Economics Will Ultimately Hurt the WORKING CLASS

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! 

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? 

Labels:

Popular posts from this blog

Wanting Wealth WITHOUT Financial Discipline

Many people want to be rich, but not so many people want the discipline on how to be rich. Isn't that the plain hard truth ? As I do this sideline blog , I contemplated whether I should write another post after writing several posts years back, or when I wrote about Venezuela as a cautionary tale . Back on topic, I thought about how financial discipline is something often overlooked. It's easy to talk about Christmas since that's probably the most wonderful time of the year to be spendthrift , only to find out that one's broke by the New Year . The cycle of reckless financial habits tends to restart in January, even when January becomes that time of reckoning between debtors and creditors! January 2026 will end, February 2026 comes, and then the cycle of financial recklessness continues. It's the same cycle over and over! Last Christmas, I remember how DTI Secretary Christina Roque spoke about the PHP 500.00 noche buena, for a family of four . I called it tactless b...
Read more

Venezuela as a Cautionary Tale on #SahodItaasPresyoIbaba, Nationalistic Pride, Welfare State Economics

The Sunday Guardian Years ago, I wrote about Venezuela's pride and protectionism , under a more "formal" style of writing compared to my latest posts. I decided to use an even "less formal" and "less academic" tone since I'm not writing a term paper. Instead, it's like how a professor and a student discuss the thesis using first person over third person, using contractions, etc., while the thesis doesn't use such tones. Back on track, I thought about the arrest of Venezuelan President Maduro can spark debate. Was it a violation of sovereignty? I'm no expert on international law. However, Venezuelans can be seen celebrating Maduro's arrest. Right now, I'm using Gemini AI and Google search to help me find some sources for this blog. It's because I don't want my blog to become another gossip central, but a place to discuss facts with my own personal opinions (making sure they don't  derail the facts).  I used Venezuela ...
Read more

Communist Vietnam's Great Leap Forward in Agricultural Production

I remember reading through Third World to First by the late Lee Kuan Yew. It's very easy to use the book to badmouth the Marcoses but not to learn from the rest of it. The book also talks about Vietnam and LKY's encounter with the late Nguyen Duy Cong aka Do Muoi. It's often said that Singapore only opened because of its lack of natural resources. On the contrary, Do Muoi decided to learn from Singapore how to turn the Communist Party of Vietnam into a powerhouse. Do Muoi, though a communist , was impressed by Singapore during his October 1993 state visit. Vietnam, unlike Singapore, is a country rich in natural resources. The third-world mentality said that MNCs are there to rape the resources .  A very huge misconception especially if you know Singapore's history Some Filipinos on social media even say that FDIs will destroy agriculture and nature. This is a meme by the Philippine Anti-Fascist League on Facebook. They say that FDIs equals environmental degradation. Yet...
Read more

Filipino Manufacturing's Golden Age ENDED Because of the Filipino First Policy

Here's a picture from the Dose of Disbelief Page on Facebook. Here's something that it wrote: Filipinos once trusted locally made products more than imports. Before World War II, the label "Made in the Philippines" carried prestige, not stigma, reflecting a strong sense of national confidence in domestic production. Local products such as shoes, cigars, textiles, furniture, and food were often preferred over imports. This preference was rooted in the belief that local goods were better adapted to local conditions, tastes, and were often of comparable, if not superior, quality. This period showcases a strong historical era of consumer nationalism and thriving local industries. We need to look into the context of Filipino history  If we look at the Philippine history timeline , we must account for 1935-1940, during which the Philippines was under the Commonwealth government. Independence was declared from Spain on June 12, 1898. However, there was a transition period w...
Read more

The Saying "The Customer is Always Right" isn't Right

I remember being chastised and said, "The customer is always right!" It became hypocritical because the same person who told me that later chastised me for yelling at the service provider in public . I'd admit that I screamed at the phone or even in person because things didn't go my way. My favorite excuse would be, "You said the customer is always right, right?" Going by the logic that the customer is always right, I'm right in doing the wrong that I did to service providers. It also reminds me of some rude manager lady (who I believe got fired sometime later, not going to mention her name or the company) who's heard to be highly unreasonable . She would scream in public louder than the late Miriam Defensor-Santiago.  I'd like to give an illustration of the fault of that phrase. The news of a raging customer who threw hot soup at the manager can create debate . Was she in the right when she threw the hot soup at the manager instead of talking t...
Read more