How to stop or solve the poverty in the Philippines?

[al1974]

to Tarmac, the reason why Jollibee opens stores in the USA is because companies have to grow revenues and profits to meet share holder and street expectations. If Jolliebee can crack the USA market it will attain these goals. Someone at Jolliebee looked at the market demographics, prepared a business case that was eventually approved by the company that said it had a positive NPV or EVA with all the required checks and balances. But a business case is just a piece of paper. Jolliebee will have to deliver on these expectations while competing in a very competitve fast food market with the likes of McDondalds, Burger King, KFC, Chick Filet and a host of other wannabees. Jolliebee has a brand upside because so many filipinos are aware of the brand and enjoy its products. The jobs in the USA pay more because of the law, but more importantly labor competition. To attract and retain fast food workers, companies must pay competitive wages in markets where labor over-supply does not exist. Another fundamental economic principle.

It opened in the US because there is a demand and not just for Filipinos alone. It opened there because there is purchasing power. Yes the Filipino base customers will help in its initial stage but thats not the end all and by all. Its still purchasing power. It did not open to a poor country because wages are cheap. By the way- Jollibee in the US follows statutory requirements just like in the Phils.

[al1974]

Harvard University defines POVERTY as improper distribution of wealth. When Capitalists/Rich People (which is the minority in a third world country) owns majority of the resources because they are paying slavery wages, then there is poverty.

What hyperwage is asking is the true value of labor- a salary where one can LIVE and not merely survive.

Yes- Hyperwage countries like the US have expensive way of life, but then again- the lowest wage earner (earning the mandated wage) in US can LIVE. In the Philippines, the lowest earner hardly survive.

[Tarmac]

AGAIN, some people would like to ask a lot of questions on Hyperwage Theory but don't want to read the book- read it first and then we can go on to a better discussion. But then again, one can not fill a glass that's already filled.

Read it and realized the answers to your questions.

And I read the book but it did not answer all my questions either. Just because he dealt with the issue does not mean he is necessarily right.

I do not believe his assertion that hyperwage will build a superstructure of increased spending, increased employment and increased economic activity just like that. Goods and services will not adjust overnight either. In the meantime what will happen to the monetary markets? I am not dealing with theory, I am dealing with practical consequences.

I do not believe the simplistic assertion that if I pay my employees thousands of pesos more today, that thousands of pesos (and more) will come back to me in three days' time just like that. No business can sustain a tenfold increase in wages over 5 years. That means business owners need to increase salaries 78% a year for five years compounded! That does not even account for inflation or currency devaluation which Bentulan says must be compensated for, so you're actually looking at more than 78%.

Sounds great in theory, but I will most likely see myself shuttering my business or at the very least putting some or most of my employees out to pasture thereby being an unfortunate contributor to the undesired effect of unemployment. Hopefully their spouses or children or parents work for the oligarchs that Bentulan says have billions stashed away and will survive jacking up their employees' wages practically overnight.

He was effectively saying something so radical as a tenfold increase in five years will not introduce shocks into the country's financial and monetary systems; that circular flow and Sutton's Law and the multiplier effect and the asymptote of inflation and all that will take care of everything. This was supported, he says, by the CK1994 study. That was a one-time 18.8% increase in minimum wage, not a near-doubling of wages for five years.

Things take time to work out.

Even Bentulan himself knows this. Or at least seems to. He knows people will be displaced and businesses will close down. That's why he proposes a "safety net" of sorts because there will be displaced workers during the "enterprising (sic) streamlining process" (his words).

But this safety net will have to come from the government and will require the support of the World Bank, the IMF and the other world governments (yes, Bentulan says this too, even though he dismissed the World Bank as a 'world-class failure'). He proposes loans, training and entrepreneurial development (the same thing POEA promised OFWs displaced by the global economic crisis, did they take a page out of the Hyperwage book? Interestingly enough, these programs were widely panned as being ineffective). Whether or not these programs are effective, they do have a cost. And it's bound to be massive. That's why I asked earlier whether our government can actually afford to step in. That has not yet been answered. All I have been told is that my business will not fail and I will not be giving out pink slips because any increase I give out now will come back to me three days later. Yeah right.

If you think I am wrong, please disabuse me of the notion beyond merely telling me to read the book. Because I already have.

I've tried to move the discussion forward to the implementation stage, something not even Bentulan has addressed adequately (he lapses into vague generalities and motherhood statements--to borrow his and fool's favorite put-down--on hand holding and political will). We could transpose most of his solutions to the issue of, say, saving the whales and they'd just be as applicable (except the part about electing him into public office).

But I'm sure I will still get lectured on the fundamentals.

.

[Tarmac]

It opened in the US because there is a demand and not just for Filipinos alone. It opened there because there is purchasing power. Yes the Filipino base customers will help in its initial stage but thats not the end all and by all. Its still purchasing power. It did not open to a poor country because wages are cheap. By the way- Jollibee in the US follows statutory requirements just like in the Phils.

Hey, I saw Jollibee in Ho Chi Minh City, Vietnam. There must be lots of purchasing power there too.

And if purchasing power is Jollibee's primary consideration in choosing overseas outlets, they should open in Norway, Sweden and Denmark. Those are hyperwage countries by SS definition. I'm sure the Scandinavians have lots of purchasing power.

Owner Tony Tan Caktiong has always maintained that expansion plans for Jollibee are predicated on the presence of a sizable Filipino community. He should know...

.

[Vince Russo]

Found this article in today's SunStar, entitled, "RP Least Competitive".. It appears that it's going to take a lot more than across the board salary increases to solve the poverty situation... Read on, and please note that there are no references to low wages anywhere in the article.


THE Philippines needs to do more spade work to avoid slipping to the ranks of the least competitive nations on earth.

This was the advice of two economists, Prof. Lourdes Sereno of the Asian Institute of Management (AIM) Policy Center and Dr. Joseph Anthony Lim of the Ateneo University. Sereno and Lim made a presentation last week on the weakest links in the country’s competitiveness as compared to 57 other countries covered by the World Competitiveness Yearbook of 2009.

Sereno zeroed in on the gap in Philippine ranking of 54th out of 57 countries or fourth to the last in the quality of its basic education. “We are second to the last in primary education at number 56,” she pointed out. In the Asian region, she said, the Philippines is worst in teacher-pupil ratio. She also raised the need to address the mismatch between skills taught in school and those that the domestic economy requires.

The recently released World Competitiveness Yearbook found that the Philippines’ weakest link was in international investment where it ranks 56th out of 57 countries reviewed.

The country was also one of the world’s worst in public finance and education, at number 54. Public finance rates a country on how it manages public funds. The country is notorious for rampant leakages, bribe-taking and corruption.

The Philippines was also found to be among the worst countries in business-friendly legislation (50th), and productivity and efficiency (51st). It is at the bottom of the list in terms of basic infrastructure and at 56th place in scientific infrastructure. Explaining why the country sank to the last rank in infrastructure, Lim said the drive in previous years to bridge the gaping budget deficit sacrificed much needed infrastructure. He further said that the country is worst in the distribution of public works projects nationwide, worst in energy infrastructure and worst in water system. (Philexport News and Features)

Published in the Sun.Star Cebu newspaper on July 20, 2009.

[mannyamador]

The article points out some of the basic causes of poverty: massive corruption and economic mismanagement, poor education. These are the things that have tp be addressed, not "overpopulation" or some other unimportant factor.

[Vince Russo]

Harvard University defines POVERTY as improper distribution of wealth. When Capitalists/Rich People (which is the minority in a third world country) owns majority of the resources because they are paying slavery wages, then there is poverty.

What hyperwage is asking is the true value of labor- a salary where one can LIVE and not merely survive.

Yes- Hyperwage countries like the US have expensive way of life, but then again- the lowest wage earner (earning the mandated wage) in US can LIVE. In the Philippines, the lowest earner hardly survive.

Yes, they're LIVING... but struggling to get by each day. Struggling to pay rent, utility bills, gasoline bills (if they have a car), and frequently maxing out their credit cards to try and pay for everything. Is that the life that people here aspire to in order to have a bigger salary? It still equates to poverty, doesn't it? Not being able to afford things? Take your pick of reasons: The salary is too low/the price is too high... What's the difference between "costing too much to buy it" and "not having enough money to buy it"? You're gonna hate to hear this, but a poor person here is probably better off than a poor person in the US. Here, the tropical weather allows you to sleep outside without freezing to death. The tamer culture allows you to be out at nite without being beaten and robbed. There aren't fruit trees everywhere, and no roadside stands selling low cost meals on the streets. You can't slaughter a pig in your backyard and use it for food, either. Personally, if I had had only a few bucks in my pocket, I'd rather take my chances here.

[Soul Doctor]

It is a simple as elementary algebra.

The equation:
The number of Mouths to feed should be equal to the number of hands that feed them.

In short every family must have 2 children only for us to solve poverty.

In china a few decades ago, they decided to do something with their population.
So they passed a law
that limits every couple to only have one child for the first ten years of their marriage.
They can have the second child on the next 10 years.

The punishment:
1 year imprisonment if you violate it
or a penalty to pay equivalent to one year of your salary.

Now they solved their problem.

Lacson also planned to make a similar move.
I Just wish that he will run for president.
We really need someone who has the guts to make realistic and tough reforms.
I know he is guilty of other things. I'm not that naive.

I just wish we get serious about our population problem.
We can only start with our own family.

[Nee0]

It is a result of the low morals of our society. Corruption, dishonesty and lack of social responsibly are the major causes of this. We all have to change, from the top to the bottom, The government, private institutions, every family and all individuals young and old. Imagine if each one of us will be good and will do their responsibility and help one another. Successful lowly creatures like Ants and Bees are examples of living cooperatively and helping out to one common goal. So let us do our share and keep out hopes up and be positive. Responsibility, honesty and hard work will definitely solve this POVERTY

[Dakota]

to al1974 on currency valuation. Raising prices is the definition of economic inflation. Inflation caused by HT (arbritary price inceases or inflation) without a corresponding increase in the value of the pesos note as related to increases in GNP and other currency determinants will cause a devalution of the peso note vis-a-via other currencies. Productivity as represented by increased economic output must increase accordingly. Other countries will not let you export yor inflation to them. They will devalue your currency. Its an efficient and free market.