FAT-FREE ECONOMCS | Why we don't need the Kasambahay and Solo Parents bills

[ghosthunter]

FAT-FREE ECONOMCS | Why we don't need the Kasambahay and Solo Parents bills
By: Nonoy Oplas
November 25, 2012 2:29 PM


State welfare is sometimes defined as “the politicians are well, taxpayers pay the fare.” This is true for taxpayers’ funded welfare and subsidy programs for the poor, like the conditional cash transfer (CCT), education and healthcare, housing and credit, train subsidy and tractors, or condoms and pills.

But there are other state welfare programs that are not funded by taxpayers. Instead, the government forces private enterprises and employers to provide mandatory price discounts to consumers, or mandatory high wages and other benefits to workers. Those caught violating will penalized. Examples of this type of welfare are the minimum wage law and mandatory discounts to senior citizens and persons with disabilities.

There is a measure that is expected to become a law soon - the “Kasambahay Bill” or “Domestic Workers Act” lodged as Senate Bill No. 78 and House Bill No. 6144. The bicameral conference committee has already approved a common measure this week. Among the provisions of the unified bill are:

- Monthly minimum wage of P2,500 in the National Capital Region, P2,000 in chartered cities and first class municipalities, and P1,500 in other municipalities;

- Kasambahay entitled to other social benefits such as Social Security System, Philhealth, and Pag-Ibig Fund, with employers shouldering the premium payments if the helpers receive a monthly salary below P5,000; and

- Kasambahay should have a written contract specifying the terms of employment, a pay slip, daily and weekly rest periods, service incentive leave of five days with pay, 13th month pay, and so on.

The premise is that domestic workers are generally exploited by their employers and so must be protected by the state. This logic can be faulty. Hiring of domestic helpers is a private and often intimate contract with workers who often live in the house of the employers and know many confidential and sensitive information about the household.

It is hardly possible for employers to maltreat their kasambahay as they will be exposing themselves and other family members to danger when the kasambahay will not do their work properly. Like a nanny who fails to attend just for a minute to a baby who climbs the stairs or a high chair, then falls down.

Employers often grant salaries and other perks more than necessary to inspire their kasambahay to do their work well, and make them stay long with the family. There are many instances when a yaya would take care of a baby until he/she becomes an adolescent. The employers no longer treat them as ordinary domestic workers but as extended family members.

Lazy, inefficient or rumor-mongering workers are usually fired by their employers, rendering the mandated welfare moot and useless. In the same vein, abusive employers also lose their good workers in just a few days or months. This is a penalty worse than government-mandated penalties and fines as the household heads can hardly work in their offices since they have to take care of the kids, suffering a steep decline in productivity.

The bottom line is legislative measures like the Kasambahay Bill are generally unnecessary.

Then there are two Senate bills that want to give various mandatory discounts to solo parents. SB 2563, which Senator Manny Villar introduced, seeks to amend Republic Act No. 8972 or the “Solo Parents Welfare Act of 2000,” giving additional benefits to solo parents, including a 20 percent discount on all purchases of milk or formula products, diapers, medicines and supplements, other necessary infant items for children 0-4 years old.

SB 1439 by Sen. Loren Legarda provides the following additional benefits to solo parents:

- 10 percent discount on all purchases of clothing materials for children 0-2 years old;

- 15 percent discount on all purchases of baby’s milk, food and food supplements for children 0-2 years old; and

- 15 percent discount on all purchases of medicines and other medical supplements/supplies for children 0-5 years old.

There are serious flaws in these two bills forcing companies to give mandatory discounts.

One, they assume that all solo parents in the country are poor or financially distressed. This is not true. Some solo parents are rich or have rich family members who can give them assistance in cash or kind.

Two, the bills assume that all shops, manufacturers and traders that produce or sell these goods are rich or financially stable and hence, can afford to give such discounts without adversely affecting their financial conditions. Again this is not true. While some companies are financially stable, others are not or may even be on the brink of bankruptcy due to various financial, economic and social challenges here and abroad.

Three, the bills assume that even financially unstable shops, manufacturers and importers of these products will continue selling these goods. This is wrong. One result of the implementation of RA 9994 or the “Expanded Senior Citizens Act of 2010” - which requires 32 percent discount on medicine purchases - is that small drugstores that cannot afford to keep selling medicines at a loss have stopped selling essential medicines to senior citizens. Senior citizens living in small and rural municipalities have to travel farther to bigger cities so they can buy at Mercury or other large chain pharmacies.

This proves again that Newton’s third law of motion - “For every action, there is an equal and opposite reaction” - can also apply in economics. This can be aptly restated thus: “For every government intervention to force welfare, there is an equal and opposite reaction that results in dis-welfare."

The economic tensions in Greece, Spain and other European economies that are limping from heavy public debts are additional proof that heavy welfarism can create more long-term harm than benefits. The bills on Kasambahay and Solo parents, as well as many other welfarist programs should be abandoned. Government should focus on promulgating the rule of law, protecting property rights and the citizens’ basic freedom, instead of forcing equality among people.

source: FAT-FREE ECONOMICS | Why we don't need the Kasambahay and Solo Parents bills - InterAksyon.com

[safeorigin]

there's a big difference between treating people equally and making people equal. As usual, government doing its best at making things inefficient

[shadow]

Tama Lang yan meron standard salary grades sila, Ang baba ng mga pa sweldo na mga nababasa ko Sa forum Sa mga katulong nila


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[stickers]

Ok pa yung kasambahay bill.. Fail yung solo parent bill, di ba dapat law na lang na obliged ang biological father or mother na suportahan yung anak nya even he doesn't sign/acknowledge the birth certificate?

[robot.sonic]

mas malaki pa ang savings ng katulong compared sa minimum wage earner na nagbabayad ng rent, transportation, utilities.

[jave]

A thought from the opposing side claims that many people would just opt not to have maids rather than go through with all of these things. In other words, possible result: maraming mawawalan ng trabaho.

[safeorigin]

A thought from the opposing side claims that many people would just opt not to have maids rather than go through with all of these things. In other words, possible result: maraming mawawalan ng trabaho.

exactly. even if the intention is "good", there will always be an unintended consequence.

[shadow]

exactly. even if the intention is "good", there will always be an unintended consequence.

lahat naman eh, there's always two sides of the coins...grabe naman talaga magpa sweldo yun mga iba 1.5k lang sa mga katulong...

[shadow]

A thought from the opposing side claims that many people would just opt not to have maids rather than go through with all of these things. In other words, possible result: maraming mawawalan ng trabaho.

impossible yan, yun mga garapal na mababa magpa sweldo ang affected nito

[niky]

A thought from the opposing side claims that many people would just opt not to have maids rather than go through with all of these things. In other words, possible result: maraming mawawalan ng trabaho.

Same result as Obamacare. Small businesses are cutting their workforces and work hours because they can't afford the mandatory insurance coverage.

[jave]

imo, I'd dare say that the increased minimum wage isn't as bad as people make it out to be, unless said household employs an entire workforce of helpers.

It's more of the forced dealings with gov't agencies, the formal employment procedures and the like that would prove to be a bigger hassle for people.

[uls]

discounts for single mothers?

that's an incentive for women to BE single mothers

it's also kinda like punishing women for getting married

married women have to pay full price while single mothers get discounts? wtf

girl to boyfriend: "pag nabuntis ako di tayo mag aasawa... para may single mother discount ako"

yehey!

[hein]

Same result as Obamacare. Small businesses are cutting their workforces and work hours because they can't afford the mandatory insurance coverage.

Insurance coverage for your workers is a good thing.

Obama's mother's cancer bankrupted her, which inspired him to do something about it.

[manilet]

mas malaki pa ang savings ng katulong compared sa minimum wage earner na nagbabayad ng rent, transportation, utilities.

Very true and proven to be. Kaya those working mothers sa bahay na lang magtrabaho!

[Monseratto]

Kasambahay bill is now a law. Minimum wage is Php 2,500. DH are entitled to SSS, PhilHealth, and Pag-IBIG to be shouldered by the employer if DH Salary is below 5K....

Aquino signs Kasambahay bill into law
By: Dexter San Pedro, InterAksyon.com
January 23, 2013 2:43 PM

MANILA, Philippines -- President Benigno Aquino III has signed into law the Kasambahay Bill, which is expected to benefit some 2.5 million domestic helpers.

Deputy Malacanang spokesperson Abigail Valte said Republic Act No. 10361, or “An Act Instituting Policies for the Protection and Welfare of Domestic Workers,” was signed on January 18.

The statute defines the labor rights of domestic household workers, increases their minimum wage, and provides regular employment benefits for them.

The new law sets the minimum wage of domestic workers to a minimum of P2,500 a month in the National Capital Region; P2,000 a month in chartered cities and first class municipalities; and P1,500 a month for those employed in other municipalities.

A year after the law takes effect, the Regional Tripartite Wages and Productivity Boards are mandated to review and adjust the wages for domestic workers as needed.

Besides standardized pay, domestic workers will be entitled to other social benefits provided under existing laws and to be enrolled in the Social Security System, Philhealth, and Pag-Ibig Fund, with premium payments shouldered by employers if the helpers receive a monthly salary below P5,000.

[Retz]

Kasambahay bill is now a law. Minimum wage is Php 2,500. DH are entitled to SSS, PhilHealth, and Pag-IBIG to be shouldered by the employer if DH Salary is below 5K....

Ano kaya ang parusa sa mga hindi nag abide sa kasambahay law?

[CVT]

Kasambahay bill is now a law. Minimum wage is Php 2,500. DH are entitled to SSS, PhilHealth, and Pag-IBIG to be shouldered by the employer if DH Salary is below 5K....

I agree with the P2,500 minimum wage.... Pero, for the employer to also shoulder the SSS, Philhealth and Pag-Ibig if salary is below P5000,- which easily translates to about P1K a month. - I think the P5K salary cut-off is just too high....

If cut-off is say P3000,- then the employer pays P3000 wage + P1000 benefits = total of P4000 maximum per kasambahay
If cut-off is say P4000, then the employer pays P4000 wage + P1000 benefits = total of P5000 maximum per kasambahay
NOW- Cut-off is P5000, then the employer pays P5000 wage + P1000 benefits = total of P6000 maximum per kasambahay....

(And then, plus free board and lodging and free food/eat out (you treat them as your family, right?))... which adds another P1500 per month,- then....

Worst case for this,- you "pay P7500 per month" per kasambahay..... And if you have 2 or 3 or 4.... you do the math (and the money you pay is already tax'ed money, right?).... Complicated.

17.9K:cupid2:

[shadow]

Pero Obama bigger scale naman compare Dito Sa kasamabahay bill, I mean if you want to hire 3-4 maids then pay the premium and yun tamang sweldo.

Grabe naman talaga yun iba magpa sweldo ng maids eh less than 2k


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[uls]

Pero Obama bigger scale naman compare Dito Sa kasamabahay bill, I mean if you want to hire 3-4 maids then pay the premium and yun tamang sweldo.

Grabe naman talaga yun iba magpa sweldo ng maids eh less than 2k


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no problem with setting a minimum wage for kasambahays

yung mga di maka-afford should do their own housework

but i think the single mother discount is a stupid idea

[safeorigin]

Pero Obama bigger scale naman compare Dito Sa kasamabahay bill, I mean if you want to hire 3-4 maids then pay the premium and yun tamang sweldo.

Grabe naman talaga yun iba magpa sweldo ng maids eh less than 2k


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Scale doesn't matter. It will still mean less jobs for them. They willingly took the job in the first place because:

a. their alternatives are far worse
b. their skills don't fit better jobs