How to stop or solve the poverty in the Philippines?

[foolonthehill]

You are correct, sir!

But the discoverer of the islands had the power to call them The Philippines after a king.

In this blog, mr bantulan explained this choice of term. i will paste it here after i google it.

--

Quote: Originally Posted by ieuseerm nganong HYPERwage pa man ang term ana nga FAIR wage man jud unta na ba. wage nga macomfortable ang kinabuhi sa isig ka taw.

[foolonthehill]

here is the blog entry


Friday, May 01, 2009

Hyperwage Theory is 7 Years Old Today

The idea for Hyperwage Theory came to me sometime in 1995 when I was working among US and British expatriates in Hong Kong and was assigned to several world capitals (New York, London, etc) as a result.

The central idea of course is Purchasing Power to the lowest worker. However, at the time, I did not have the full backing of economic principles to back up my discovery. Since then I have read many textbooks and history of economics with the eye of somebody going against conventional economic wisdom.

The first time I wrote about Hyperwage Theory (it was not called Hyperwage Theory then) was on May 2, 2002 in my BusinessWorld column. That was the Part 1.

Therefore, officially, Hyperwage Theory is 7 years old today.

However, part 2 was actually written in 2005 (three years after Part 1). It was in Part 2 that I settled on the name Hyperwage Theory.

I actually wanted to call it "High Purchasing Power Theory" but this phrase was too wieldy, too long, too generic, and lacking the originality of an freshly invented word. And people will be referring to it as HPPT Theory?

I settled on Hyperwage Theory although this term alone scares away first time readers.

I figured, Hyperwage is a controversial term, but, hey, I invented it and its catchy and short.

Part 1 by itself is self-contained, it described the theory and principles behind the theory. It should prove to be self-evident.

Part 2 and the series was serialized for 33 weeks (whew!) in 2005 and the series was the detailed explanation of the basic tenets mentioned in Part 1.

For all intents and purposes, the economic policy makers and the government executives were exposed to Hyperwage Theory in 2005 (four years ago).

Hyperwage Theory made the term "purchasing power" fashionable, and I am happy that I achieved my first goal with my theory, and that is "awareness."

And you can read so many accounts purporting to debunk Hyperwage Theory but look at their arguments: Do they stand on solid ground or are they just repeating the ideas of the authors of textbooks.

And why do Third World people still line up at US embassies looking for that golden visa if not in search of Hyperwage?

As long as they cannot answer you that with common sense, don't easily believe those detractors. They are not saying anything new, they are repeating the same economic ideas that have perpetrated and actually worsened the poverty conditions in Thirld World countries.
Keep these in mind as your read the articles of the opponents of Hyperwage. (But remember, the government and the politicians have started to catch on: Purchasing Power is not a popular soundbite for them. Isn't that a signal, they are beginning to see the value of Hyperwage Theory?)

Now, Hyperwage Theory has become a byword, (the butt of jokes), and Purchasing Power is the economic jargon of the times.

Have you heard about "consuming power", "spending powers" "buying power" spoken by the senators, congressmen and economic advisers to the President?

Before 2005, purchasing power was hardly a word, they uttered.

Now, that they have dipped their feet in the pool, are they ready for US$1.50 per hour (or P20,000 per month) salary for the domestic helpers?

Whatsoever you do to the least of your workers, you do unto the economy.
Posted by Street Strategist at 6:49 PM
Labels: BusinessWorld, domestic helper, Hyperwage Theory, maids, Philippines, purchasing power, spending power



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Quote: Originally Posted by foolonthehill You are correct, sir! But the discoverer of the islands had the power to call them The Philippines after a king. In this blog, mr bantulan explained this choice of term. i will paste it here after i google it. --

[juan penduko]

ang pagsolve sa poverty.

y not invite investors that use our natural resources here in our country bt also have programs of rehabilitating it. kai kun ang investors kai mag import pa sa ilang raw materials. sa labor jud nila i.hapak ang gasto. mao na atong labor is very cheap. as i watch kalye of abs-cbn. callcenter though is not really helping the economy althought it gives jobs to most and y man dagku ilang sweldo kai wala may gasto in raw materials. so if we have investors who can find raw materials especially in the phils itself murag ang atong mga wage would be better than wat we have right now.

[unsay_ngalan_nimo]

Quote: Originally Posted by al1974 There will not be any hyperinflation bro- most prices of our commodities- the imported ones- which are a whole lot are already at par with first world countries and some are even already more expensive. In the book- Hyperwage Theory, it mentions of asymptotic inflation- as far as my understanding is concerned, that means proces can only go up to a certain level. With regards to export business, that does not comprise a large chunk of our economy. Except of course if we talk about the other export business- the exported labor force- the OFW. Also with Hyperwage, people will now have purchasing power- the lowest income earner can now afford- more demand of products will happen. Anyway- to really explain the Hyperwage Theory, please read the ebook. I can not fully explain the beauty of it all with mere posts.

especially the OFWS... inig balik nila unsay assurance naa sila work? our export business is pretty low... we depend so much on imports that why we are poor..

bisan steel nalang na kaugalingon wala ta.. maypa nag korea even INdia naa kaugalignon kompanya manufacture ug sasakyan.. wala gyud ta dinhi...

[Vince Russo]

I'm hoping that Foolonthehill can address this hypothetical situation: A person on a fixed retirement income rents a house for 20,000p per month. This renter employs 2 helpers @ 4,000p each per month. The renter would be expected (with Hyperwage Theory) to boost each helper's salary to 20,000p per month? Let's see, that's 20,000p for the rent, and then 40,000p in salary for the helpers? But wait, the guy who OWNS the house and rents it out for 20,000p now has to pay each of HIS helpers 20,000p per month (he has 3, so that's 60,000p per month)... To cover the increased salaries, will he: A.) raise the rent 2X or 3X on the poor renter? or will he: B.) fire 2 of his helpers, keeping 1 because that's all he can afford... And will the renter move out of the house and into an affordable pension house, firing both helpers? No wait, there won't be any "affordable" pension houses because the staff of maids, cleaners, security guards, receptionists and the handyman will all receive salaries of 20,000p per month. The 18,000p per month room will jump to 50,000p per month to cover the huge salary increases. Is this a successful Hyperwage Theory scenario?

I just thought of something in regards to the high salary levels in the USA.. There are some real drawbacks.. Those high salaries are the main reason why so many businesses end up employing illegal aliens (usually Mexican) in the workforce. Why pay a moving company $100 PER HOUR for 4 guys to move your furniture when you can easily hire 4 Mexican laborers ALL DAY for the same $100 bucks? It's no small wonder so many American-based companies closed their doors and began outsourcing many years ago. In fact, you rarely see a label saying, "Made IN USA" anymore. Why? In many cases, paying American workers became too expensive for the businesses to remain profitable. And what could be the reason for the existence of so many call centers outside of the USA? Boosting wages sounds like a great idea, but be prepared for the unintended consequences that lurk ahead... Kinda sounds like what the union organizers used to preach... What good is having a high salary if the company can no longer afford you and you end up losing your job?

[wikki]

one thing that can slowly and surely solve the issue. proper education.

unsaon gi commercialized man sad pag maayo ang education karon. atay nalang.

[Emzs]

STOP making politics a BUSINESS ...

[foolonthehill]

simple problem, simple solution

In the book, this is fully discussed!

In general, when you are faced with an increase in costs, here are the options
1. Increase selling price (your renter who is an engr will be earning P200 per month!!)
2. Increase volume of sales (cant do anything for apartment)
3. Increase efficiency (computerize etc
4. Get out of business (dont worry somebody else will replace you; did companies go out biz bec gasoline rose 3x from P20 to P60?)

Use the above formula for your problem below...

1. are there bakeries in Paris
2. are there fish vendors in Singapore
3. are there newspaper sellers in London?

Quote: Originally Posted by Vince Russo I'm hoping that Foolonthehill can address this hypothetical situation: A person on a fixed retirement income rents a house for 20,000p per month. This renter employs 2 helpers @ 4,000p each per month. The renter would be expected (with Hyperwage Theory) to boost each helper's salary to 20,000p per month? Let's see, that's 20,000p for the rent, and then 40,000p in salary for the helpers? But wait, the guy who OWNS the house and rents it out for 20,000p now has to pay each of HIS helpers 20,000p per month (he has 3, so that's 60,000p per month)... To cover the increased salaries, will he: A.) raise the rent 2X or 3X on the poor renter? or will he: B.) fire 2 of his helpers, keeping 1 because that's all he can afford... And will the renter move out of the house and into an affordable pension house, firing both helpers? No wait, there won't be any "affordable" pension houses because the staff of maids, cleaners, security guards, receptionists and the handyman will all receive salaries of 20,000p per month. The 18,000p per month room will jump to 50,000p per month to cover the huge salary increases. Is this a successful Hyperwage Theory scenario? I just thought of something in regards to the high salary levels in the USA.. There are some real drawbacks.. Those high salaries are the main reason why so many businesses end up employing illegal aliens (usually Mexican) in the workforce. Why pay a moving company $100 PER HOUR for 4 guys to move your furniture when you can easily hire 4 Mexican laborers ALL DAY for the same $100 bucks? It's no small wonder so many American-based companies closed their doors and began outsourcing many years ago. In fact, you rarely see a label saying, "Made IN USA" anymore. Why? In many cases, paying American workers became too expensive for the businesses to remain profitable. And what could be the reason for the existence of so many call centers outside of the USA? Boosting wages sounds like a great idea, but be prepared for the unintended consequences that lurk ahead... Kinda sounds like what the union organizers used to preach... What good is having a high salary if the company can no longer afford you and you end up losing your job?

[foolonthehill]

This is a very simple discussion

People go to USA for work, USA people dont go to Phils for work.

That alone is your answer. Hyperwage is the magnet, people and biz are attracted to it.

Did you read Chapter 31?

If not, pls do so.

Quote: Originally Posted by Vince Russo And what could be the reason for the existence of so many call centers outside of the USA? Boosting wages sounds like a great idea, but be prepared for the unintended consequences that lurk ahead... Kinda sounds like what the union organizers used to preach... What good is having a high salary if the company can no longer afford you and you end up losing your job?

[rickflag]

If Hyperwage will be realized I will apply as a driver for foolonthehill. Perhaps she'll pay me 40K a month then I have free board and lodging, tax free, etc. That would be a life. Hahahah

[chuck_scofield]

The president alone, can't solve poverty in this country. Every Filipino has a role that he/she has to perform in order to eradicate this problem. Our public officials can only do so much to alleviate poverty, private citizens should also play an active role in finding a solution to this problem.

The problem is that majority of the Filipinos are totally dependent to the government. Indeed, it is the govt.'s duty to provide the basic services to every Filipino. But, this does not mean that we must rely everything to them. Money is not given, it is earned and we can only be compensated if we work.

[Vince Russo]

Quote: Originally Posted by foolonthehill simple problem, simple solution In the book, this is fully discussed! In general, when you are faced with an increase in costs, here are the options 1. Increase selling price (your renter who is an engr will be earning P200 per month!!) 2. Increase volume of sales (cant do anything for apartment) 3. Increase efficiency (computerize etc 4. Get out of business (dont worry somebody else will replace you; did companies go out biz bec gasoline rose 3x from P20 to P60?) Use the above formula for your problem below... 1. are there bakeries in Paris 2. are there fish vendors in Singapore 3. are there newspaper sellers in London?

You totally avoided the specifics of my hypothetical! A person on a FIXED (as in retirement) income will not realize any salary increase with Hyperwage. The "solutions" you offer above are meaningless, useless generalizations! The renter will be forced to fire his 2 helpers because he can't afford them. No one will pay a helper, maid, driver, handyman, security guard or gardener 20,000p per month! It's a ridiculous thought... Do YOU have a monthly rental to pay? Do you employ anyone, either in your home or in a business? I doubt that you do, because there's no way that the average person here can afford such ridiculous salaries. You rely on quotes from a book, and cannot speak from personal experience.

Your suggestion to "get out of business.. don't worry, someone else will replace you" is some kind of solution? The application your Hyperwage Theory in the the hypothetical that I presented you with is COMICAL at best.. Try to plug YOUR OWN situation into your Hyperwage fantasy and see how it affects you. I guess the notion of mass layoffs is appealing to you, because that is exactly what would occur. And when the price of gas rose, many people were forced to radically adjust their lives, just to survive each month. Literally all prices on goods requiring shipping INCREASED. That's a good thing in your eyes?

[Vince Russo]

Quote: Originally Posted by foolonthehill This is a very simple discussion People go to USA for work, USA people dont go to Phils for work. That alone is your answer. Hyperwage is the magnet, people and biz are attracted to it. Did you read Chapter 31? If not, pls do so.

You obviously misunderstood my post.. I didn't say that people were leaving the USA to work in the Philippines. My comment was that US companies CLOSED DOWN, and the work was outsourced to the Philippines (and other developing nations). American workers LOST THEIR JOBS because the companies could no longer afford to pay the high salaries there. Why pay a person 400-600 USD per WEEK to answer phones in the USA when you can pay a call center agent here 250 USD per MONTH to do the same thing? Multiply those figures 50X (fifty employees) and see the difference in savings. Increase the salary of a call center agent here to however high an amount dictated by Hyperwage Theory, (50,000p?) and watch 90% of the call centers here CLOSE DOWN and relocate in India. Virtually all companies who currently outsource here would close their doors because the salaries you suggest would price the RP right out of the game. Vietnam and India would both be incredibly happy to see Hyperwage implemented here ha ha.

[rickflag]

yeah, if you want to have a big salary then work for it. increase your knowledge. learn things that only few people know so you will be paid high. that's how market forces work. the rarer the gem the higher it will be priced. wages cannot be dictated by legislations and laws.

[Tirong-say]

Start in one's self,best planning for life and sometimes make some innovation do not follow the trend nowadays,bisan ug walay trabaho mag-minyo,improve usa and make yourself stable,for me the change does not come from other entity but comes from us.