This is really stupid in many levels of stupid. I may not be a economist -- I only have very basic knowledge in basic economics, microeconomics, macroeconimics but I know that Renato Reyes Jr.'s demands are unrealistic. It just reminded me of the time I wrote a short of the unrealistic demand of lowering the prices of unhusked rice and lowering the prices of rice grains at the same time. It has me thinking if Reyes Jr. didn't indeed finish College -- he must have never completed it because he was attending rallies instead of his economics subject. Others finish through economics and just throw it out the window!
I'd like to first address the problem of his desire to increase the minimum wage. He wants the wages to increase yet he's against economic liberalization. Does he even know why minimum wages can't increase in the Philippines? It's because of the economic status where economic protectionism not only hinders employment (which in turn lowers spending significantly) but also a lack of income. Having fewer businesses no thanks to unreasonable restrictions towards FDIs means less bank depositors (which also help the economy go round since they provide loans for businesses) and less revenues to tax. Let's think just how many Filipino businessmen are there vs. Filipinos who need jobs? That should tell you why the current economy can't afford to raise the minimum wage!
The second one has to deal with the whole fantasy of lowering down prices while having high salaries. Does he even realize that in order to produce cheaper items you also need cheaper labor? Why do you think any imported products that were manufactured in China products are cheaper? It's because labor is CHEAPER there. The cost per unit is not only computed by the cost of materials, cost of utilities (ex. electrical and water bills) but also by the cost of labor per head. If you're paying your employees a higher rate along with the cost of materials and utilities then a business must sell every unit with a higher overhead cost. If you don't sell at a higher price then how can you get profits to improve your business? You need money not just for a break-even but also to keep the company alive. You need profits to continue purchasing materials, paying bills and improving your products and services.
Besides, how can you abolish the law of supply and demand? You can't. Prices of gasoline are increasing NOT solely because of TRAIN Tax but also because of the world market. The reason why income taxes are decreased to a certain extent under tax reform WHILE taxing certain items (ex. sugar tax, gasoline tax, car tax) is for control measures. The TRAIN tax law somewhat had its benefits and downside. Upside, I get to enjoy more of my personal income after taxes while the downside is that some things I indulge in get taxed for are now more expensive. It has me re-evaluating of whether or not I want to get some ice cream and chocolates after taxes are paid. In short, the new law makes me or anyone reconsider one's spending habits. I really agree with the whole gasoline tax (though it may have to be revised every now and then) and car tax (otherwise, traffic in the Philippines may soon beat China's already unbearable traffic). TRAIN tax was made to make sure that the working class get more spending power than under the old tax law. Also, it means no more free rides -- I guess Reyes Jr. will miss all his free rides too.
I'd like to first address the problem of his desire to increase the minimum wage. He wants the wages to increase yet he's against economic liberalization. Does he even know why minimum wages can't increase in the Philippines? It's because of the economic status where economic protectionism not only hinders employment (which in turn lowers spending significantly) but also a lack of income. Having fewer businesses no thanks to unreasonable restrictions towards FDIs means less bank depositors (which also help the economy go round since they provide loans for businesses) and less revenues to tax. Let's think just how many Filipino businessmen are there vs. Filipinos who need jobs? That should tell you why the current economy can't afford to raise the minimum wage!The second one has to deal with the whole fantasy of lowering down prices while having high salaries. Does he even realize that in order to produce cheaper items you also need cheaper labor? Why do you think any imported products that were manufactured in China products are cheaper? It's because labor is CHEAPER there. The cost per unit is not only computed by the cost of materials, cost of utilities (ex. electrical and water bills) but also by the cost of labor per head. If you're paying your employees a higher rate along with the cost of materials and utilities then a business must sell every unit with a higher overhead cost. If you don't sell at a higher price then how can you get profits to improve your business? You need money not just for a break-even but also to keep the company alive. You need profits to continue purchasing materials, paying bills and improving your products and services.
Besides, how can you abolish the law of supply and demand? You can't. Prices of gasoline are increasing NOT solely because of TRAIN Tax but also because of the world market. The reason why income taxes are decreased to a certain extent under tax reform WHILE taxing certain items (ex. sugar tax, gasoline tax, car tax) is for control measures. The TRAIN tax law somewhat had its benefits and downside. Upside, I get to enjoy more of my personal income after taxes while the downside is that some things I indulge in get taxed for are now more expensive. It has me re-evaluating of whether or not I want to get some ice cream and chocolates after taxes are paid. In short, the new law makes me or anyone reconsider one's spending habits. I really agree with the whole gasoline tax (though it may have to be revised every now and then) and car tax (otherwise, traffic in the Philippines may soon beat China's already unbearable traffic). TRAIN tax was made to make sure that the working class get more spending power than under the old tax law. Also, it means no more free rides -- I guess Reyes Jr. will miss all his free rides too.
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