Can Leni Loud Robredo Raise Up Salaries Without Increasing The Cost Of Goods?

 
This is JUST AMAZING now, isn't it? Members of the Alliance of Labor Leaders for Leni Loud are now asking for HIGHER WAGES AND LOWER PRICES. Seriously? If they are going to look at the COSTS OF PRODUCTION - salary is part of the COST OF PRODUCTION. If salaries are high then the cost of production gets higher. If a restaurant pays the staff more then they should charge the customers more. If a restaurant offers better food and services then naturally the prices must GO UP. The same goes for the production of goods and services - a higher salary means a higher cost of production. If they want higher salaries then the cost of goods must GO UP in order to come up with higher salaries. If farmworkers are paid more then shouldn't the cost of agricultural products be sold at a higher price to keep up with the salary? Otherwise, it would be forced to lay off certain workers if higher salaries are to be paid. Layoffs happen if the company can't pay everyone's salary at that same rate. The prices of goods are also determined by SUPPLY AND DEMAND. If demand goes up and supply is low - the answer is the prices will GO UP. It's just like the world market and gasoline. So blaming TRAIN Law isn't entirely right. I think TRAIN law needs to get rid of the gasoline excise tax since that also helps contribute to the increase of prices. Gasoline is needed to pay for transportation and people do a mark-up in order to pay for the cost of fuel.

Some time ago - I wrote about how economic ignorance leads to backward thinking. Reading and listening to all the ignorance can be very frustrating. As a commerce graduate, I should at least understand basic economics and cost accounting. Obviously, if there are no economies of scale then there will be no price drop. It's stupid to sell low when the cost of production is high. Sometimes, you need to sell at a lower price to get rid of excess inventory that was made at a lower cost. The economic ignorance of a lot of Filipinos is really amazing. It's like how some people say so and so is the better president because the prices of gasoline were lower during that time. One must wonder if the late Noynoy Aquino went to Saudi Arabia, did a rain dance with Teddy "Dancing Boy" Baguilat, and get the gasoline for free. I even wonder if Leni Loud herself will bother to go to Saudi Arabia, do a rain dance with Dancing Boy, let it rain, to get free gasoline like in the movie Ang Tanging Ina N'yong Lahat? TBH, Leni Loud is really running her campaign like Ina Montecillo in the same movie. I'm laughing (and facedesking) at the same time.

I think we need to take a look back at Noynoy's economics too - just in case. Noynoy did mention about he wasn't in favor of lowering income tax rates while raising Value Added Tax (VAT). Increasing VAT would increase the prices of goods, right? If VAT were increased then prices of goods will increase. I think Noynoy was shortsighted when it came to not lowering tax rates. However, if the lowering of tax rates were done while increasing VAT then it might not be a good idea. Noynoy didn't promise to increase salaries and lower down prices magically. What was part of Noynoy's policy was to ease down CERTAIN restrictions of the Foreign Investment Act of 1991. However, it's sad that Noynoy didn't see the beauty of easing restrictions concerning public utilities or maybe he did. Either way, those restrictions in the negative list needed to be eased ASAP. Dancing Boy needs to get it right into his head that Vietnam doesn't have excessive ownership restrictions!

What Leni Loud should be focused are on is the economic charter change. I'm talking about easing the limits of foreign equity - especially in the utility sector. More power suppliers, more telecommunications companies, more water companies - that would significantly ease the price burden of paying for them. If you're wondering why the Internet is slow and expensive - blame it on the supply and demand. Can Globe or PLDT actually give faster and better Internet services if there are no economies of scale due to too much demand and too little supply in an archipelago? Sure, there's DITO now but can three telcos do the job? The same can go for electricity - if foreign investments can own beyond 40% then the costs can be lowered because supply will go higher to fill in the demand gap. Leni Loud should review her economics if she expects to be the next president. Leni Loud should advocate RIGHT NOW the need for economic charter change even before the 2022 elections.