COMPENSATION BELOW

MINIMUM WAGE A VIOLATION

OF HUMAN RIGHTS
 Introduction
• It is an elementary principle in the modern legal system that human
rights, life, liberty, property, etc. must be respected, on the
assumption that respect to human rights is what makes man different
to animals.
• However, it is very ironic that man, who is considered
the most intelligent being ever walked in the planet
earth, continues to disregard the basic rights since time
immemorial…
• This proves himself as the most cruel being that have ever lived on
earth.

• Still, human rights based on history and facts are still considered
cheap around the globe
• It is the humble purpose of the researchers in this paper to unmask
the glaring reality happening in our midst, that is, violation of labor
rights.

• All of us are aware of it but we just took on the issue without even
batting an eyelash. It is our fervent hope that in our own little ways
we may lighten the burden during the interview
 ackground
• The research deals mainly on minimum wage rate pursuant to the delegated powers
conferred to the Department of Labor, and guaranteed by the Constitution in relation
to the underpaid employees of a certain establishment (UNITOP).

• Based on Article XII Sec. 19 of the 1987 Constitution, The State shall afford full
protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.

• Also, it provided for entitlement to security of tenure, humane conditions of work, and
a living wage. This study specifically points out the issue of wages, which should be a
“living wage”, which is the continuing issue in the UNITOP.
 Region XI Minimum Wage
• The Labor code provides for the contract of employment
for work done or to be done, or for services rendered or
to be rendered and includes the fair and reasonable
value, as determined by the Secretary of Labor and
Employment.

• Recently, the current daily minimum wage rates of

Region XI, Davao Region Per Wage Order No. RTWPB-XI-
20 (Effective: 16 August 2018) is now Three hundred and
seventy pesos (370 Php), which does not reflect on the
amount paid by the UNITOP to some of its employees.
 Labor Code on Wage
• Wage, as provided by Article 97 of the Labor Code –
“…paid to any employee shall mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for work
done or to be done, or for services rendered or to be rendered and includes the fair and
reasonable value, as determined by the Secretary of Labor and Employment, of board,
lodging, or other facilities customarily furnished by the employer to the employee.”

• "Fair and reasonable value" shall not include any profit to the employer, or to any person
affiliated with the employer.
 Review of Related Literature
• Karl Marx’s Fetishism of Commodities

• Douglas Groothous’ Moral Argument Against the Minimum Wage

• Paul Glenn’s Ethics on Man’s Work.

 Karl Marx’s Fetishism of
Commodities
• Here, Marx questions the value of “commodity”.

• For him, the value of the commodity comes from the “labour”,
specifically the “human labour”.
 Karl Marx’s Fetishism of
Commodities
• However, the capitalists treated commodities as
if object themselves with their own intrinsic
value.

• As a result, the human labour became value-

less. This, sadly, became the reality instead of
that of Marx’s idea.

• However, he still believes that the commodity’s

value comes from a human’s labour.
 Karl Marx’s Fetishism of
Commodities
• Karl Marx described the relationship among labor, capital, and
commodity. He also described the value of commodity.

• For him, the value of commodity should be based on the value of

labour put in a certain commodity.
 Karl Marx’s Fetishism of
Commodities
• However, Marx did not explain the value of labour that we used in the
production of commodity. What is the value of effort that man exerted to
produce a commodity? How are they compensated?

• There were discussions on how to properly compensate the labourers. One

solution they posted was a setting of minimum wage.

• However, this solution posted another question:

Should a minimum wage be set by the government?
Douglas Groothous’ Moral Argument
Against the Minimum Wage

• According to Douglas Groothous, the

idea of setting a minimum wage is
immoral.

• Socially, the minimum wage is a type of

social contract. Two parties, the
employee and the employer, are
involved in negotiating a contract over
labor and compensation.
Douglas Groothous’ Moral Argument
Against the Minimum Wage

• The negotiation is voluntary in that the employer is not being

forced to hire any specific person and the employee is not
being forced to work for any particular company,
and consensual in that both employer and employee mutually
agree to the terms and conditions of the labor contract.
Douglas Groothous’ Moral Argument
Against the Minimum Wage

• Within the philosophy of social contract theory, one’s moral

obligations are relative to the contract that is agreed upon. In this
case, once the contract has been signed, the employee is morally
bound to fulfill their work responsibilities, and the
employer is morally bound to compensate them for
their labour (through wages, medical benefits,
vacation time, paid time off, sick leave, etc.)
Douglas Groothous’ Moral Argument
Against the Minimum Wage

• If either side fails in their duties, the

contract can be broken; the employer has
the right to fire the worker or the
employee can look for work elsewhere.
 Endogenous factors
• Wages cannot be determined by any objective, universal standard of labor compensation
but rise and fall with subjective valuations . These subjective valuations are driven by
both endogenous and exogenous factors.

• Productivity, or the value an employee adds to the company, is a major

endogenous component.

• Productivity is determined by internal and external factors: internally, education, skill,

work ethic, and behavior can positively or negatively impact productivity;
externally, business management and organization, technology, and employee
care can impact productivity.
 Exogenous factors
• The greater the productivity, the higher the wage.
• However, exogenous factors also determine wages, namely, supply
and demand. If there is a large demand for engineers, but few people
qualified to do that work, companies will compete for that labor by
offering higher wages.

• Conversely, if there is a surplus of manual laborers competing for a

limited number of jobs, wages will drop as companies are able to hire
at the lowest wage accepted.
 Wages should be determined by
internal and external factors

• Finally, employers are not

prohibited from paying more
than the market-determined
wage out of their own
abundance and generosity,
but no dictate of justice or
fairness requires them to do
so and the government
should never force them to.
 Paul Glenn’s Ethics on Man’s
Work
• Two kinds of wages. These are nominal and real wages.

• Nominal wage is the sum named in the contract while the real wage
is the exchange value of this sum.

• In other words, the nominal wage is the face value of the money
paid, and the real wage is the amount of goods this money will buy.
 Paul Glenn’s Ethics on Man’s
Work
• Workman and employer agree on the wage to be paid; the workman gives his
labour, in terms of products (piece work) or of time (day-work, monthly work,
etc.), and the employer pays money.

• Thus between the employer and the labourer there is a contract made, and this
contract is bilateral, since there is an obligation imposed by the contract upon
both parties to it.

• Now, as we have seen, a true contract requires freedom in the parties.

 Paul Glenn’s Ethics on Man’s
Work

• But if the workman is forced to accept the employer’s term, or starve,

he has no real freedom in the matter; unless the terms offered are
humanly liberal, and injustice is done to the worker.

• Out of this situation arises the just wage. Certainly, the worker is
entitled to justice; hence he is entitled to a just wage.
 Paul Glenn’s Ethics on Man’s
Work
• If men were free to regard human labor as a material good to be disposed of
like any commodity; if they were free to buy and sell it as they are free to buy
and sell tools, or land, or domestic animals; then the matter of deciding upon
the actual amount of a just wage would be comparatively simple.

• Men would simply look for the market value of labor and dispose of it at that
price. Labor is not merely a material commodity.

• It has in it something of the nature and dignity of man. It has a human

element.
 Paul Glenn’s Ethics on Man’s
Work
• A wage contract, a contract in which labor is exchanged for money,
must not be an agreement which turns a man into a chattel; it must
not be detriment of a man with rights to life, to health, to good moral
influences, to the performance of duties of vocation, such as the
founding and supporting of the family, the provision for age and
sickness in himself and in his dependents.

• The wage contract must be such as takes into account at least the
minimum essentials of a proper, full, and rounded human life.
 Living Wage
• A just wage is obviously not to be computed in
figures; no nominal just wage can be fixed, for
nothing is so variable as the exchange value of
money.

• But something like a fixed requirements for a just

wage may be established in real terms, i.e. , in terms
of what such a wage should be capable of providing.

• Certainly a just wage must be a living wage, i.e., such

as will enable the recipient to live a decent and
respectable, if frugal life, and to provide something
for times of age, ill-health, or unemployment.