Why Filipinos Are Not Rich
he Street Strategist has arrived at the conclusion that the poor Filipinos are not rich because they do not have money. This is a very simple concept but it takes a genius to appreciate its simplicity. You may notice that I am trying to explain “why Filipinos are not rich” in contrast to “why Filipinos are poor.” Is there a difference? Yes, there is. In asking “Why Filipinos are not rich,” the implication is that the normal state of events should be that Filipinos are rich and we have to explain if ever they are not in the normal state, that is, we have to explain why Filipinos are not rich when supposedly they should be rich. Diminishing circle Anyway, let us ...view middle of the document...
Thus, we are locked in an ever diminishing circle. Community of inequality Let’s view this from another perspective. According to a World Bank study, 1/3 of the wealth of the Philippines is owned by only 5% of the Filipinos. This is a huge disparity. This is an egregious distribution of wealth. In economics, the Gini coefficient is the measure the gap between the rich and the poor. What does this statistic mean? Try to visualize a community of 100 of your friends. For every PhP100 spent within this community, after all is said and done, these expenditures and incomes will eventually settle as asset or wealth distributions. Of every PhP100 in asset, PhP33.3 goes to only 5 of your friends (PhP6.70 per pax). The balance of P66.6 is distributed among the reminding 95 friends (PhP0.70 per pax). Can you imagine how inequitable that is? That’s a ratio of 9.5 to 236
Why Filipinos Are Not Rich
1, or 950%. And did you forget something? Those 5 friends of yours were actually not doing any work at all. They were playing golf all day, while your other 95 friends were the ones toiling under the hot sun, fighting against each other, backstabbing each other, and knocking on doors at night to sell products. Is that fair? What is really callous is that your rich 5 friends have billions of money that they could not possibly consume in ten lifetimes. Single solution And yet you ridicule me for proposing a single solitary action, that is, a legislated minimum wage of P20,000 ($400 at $1=PhP50)? Please remember, I am not advocating communism, socialism, or confiscation of property. I am only advocating the correct valuation of labor, the world market price for labor. Why can’t our teachers be paid like the teachers in Singapore? And Singapore has zero natural resources to rely on unlike the Philippines? Squander Myth: The Filipinos are poor because they squander money. I heard so many upper class people say this. I even heard on radio somebody who cited their rich neighbor whose children squandered their inheritance. But many Filipinos are fortunate enough to inherit wealth? A few thousands? We have about 35 million workers, and that’s the majority. They have nothing to squander. Job search Myth: The Filipinos don’t look for jobs. I find this too simplistic. Filipinos are looking for jobs so much so that millions of Filipinos in search of work worldwide. Maybe there are too few jobs here in the country. I have repeated many times why is there only a few jobs around. That is why I wrote several chapters on the topic of job creation as a result of the Hyperwage Theory. 237
Thinking Time: The Misadventures of the Street Strategist Vol. 12
Maybe the jobs are not paying well enough. If the actually wages are lower than the threshold reservation wage (the point at which the worker is indifferent if he has a job or not), then maybe that’s the reason they do not apply for jobs. Remember if you work in the US for one year that is equivalent to 10 years in the...