“Endo versus Dividendo”
“Endo versus Dividendo”
By Ramon Ike Villareal Señeres, CESO, CSEE
I told my daughter Lauren that the “baristas” working for our favorite coffee shop are not really employees of that company, and who are in fact “clients” of a third party employment agency that does not give them long term benefits. I took the opportunity to ask her who would be the ideal owners of a cooperative that will go into the coffee shop business. Should it be the customers, or should it be the workers? Her answer was direct to the point. It should be the workers, she said.
I am not an anti-capitalist, because I believe that private capital is needed in order to keep the economy going. For me, it is not a question of what I am against. It is more a question of what I am for. I am for the equalization of access to business, so that more people will have the opportunity to earn profits from their own labor. As I see it, the key to this is the cooperative approach, because it is only through this approach that the private capital of small investors could be pooled together for their common good.
Having started the topic, I asked my daughter and my wife Lorine who had joined the conversation, who would be the ideal owners of a cooperative that will go into the bus transport business. Should it be the drivers, or should it be the passengers? Their answer was the same, it should be the drivers. I was completely fascinated by their answer, which came without hesitation from both of them. Could they be thinking in the same way that most people would think?
I know for a fact that the so-called “manpower cooperatives” are not new in the sense that they have been around for some time. However, I also know for a fact that some of these “manpower cooperatives” are actually fake, in the sense that they are not owned by the workers, and are instead owned by “agents” (or puppets) who are fronting for the real owners who are no other than the actual owners themselves who are simply circumventing the labor laws.
Not wanting to stop while I was ahead, I asked my wife and daughter whether they could imagine a big store that is owned by the salesgirls and the cashiers, instead of the big store chains, and they said yes, adding that it would be a good idea to have that kind of a big store. When I asked them that question, I had in mind the thousands of salesgirls (and salesmen) who are now working for the big stores not as organic employees, but as contractual employees who are hired through employment agencies that are really just acting as their job placement “brokers”.
In theory and in practice, there is actually no employee-employer relationship between the stores and the contractual workers, and neither is there an employee-employer relationship between the employment agencies and these workers. In short, these workers are actually victims of the invisible yet vicious crime of “contractualization”.
Believe it or not, this word “contractualization” is not even in the English language, because apparently, it is only in the Philippines where this word was invented. Quite sadly, it has a translation in the local language that is also not found in any other language. “Endo” is the slang word for “end of contract”, and this word is now also the term used for the sub-culture that has emerged among all the victims of “contractualization”.
The only difference between the contractual employees and the owners of the big stores is that the latter has access to capital. The only difference between the contractual employees and the placement agencies is that the latter has access to information. The placement agencies are actually not creating any value added that should entitle them to their huge fees, because they are merely just brokering on the strength of the information that they have gained access to.
It is not in my place to run after the perpetuators of “contractualization”, because that is the job of the government. I figure that the time I would spend to run after them could better be spent in helping the workers so that they could gain access to both capital and information, two assets that are not too impossible for them to get hold of. Besides, this is a free country where free enterprise is supposed to flourish, so let us just leave the big stores to do their business, even if we have to compete with them if we have to.
Am I out of my mind when I say that we could compete with the big stores? When I say “we”, I actually mean the workers who could possibly pool together their small capital in order to invest in big businesses. Maybe I am not really out of my mind, because this small capital actually exists among the workers, if they would only know how to put it aside for a good purpose. I actually know that I am not out of my mind, because I also know that these workers and their family members are the same people who are now buying goods and services from these big stores.
Many years ago, one of the big stores offered a “credit line” to the consumer cooperatives, provided that they would back this up with a deposit that would correspond in value to their supposed “credit line”. We could presume for purposes of discussion that that department store was probably acting in good faith when it extended the offer, and that the cooperatives that took on the offer probably acted on good advice, at least at that time.
Going fast forward to the present times, many banks are now offering “credit cards” that are secured with an equivalent amount in deposits. We could just be talking about a play of words here, because what the banks are actually offering are “debit cards” and not “credit cards”. Recently, a new twist has come to the play of words, because some of the banks are now issuing “cash cards” or “money cards” that are secured not by “deposits”, but by “loads” or “reloads” as the case may be.
Going back to the “credit line” that was offered by that department store to the cooperatives, it would appear that the former simply cooked the latter in their own lard, because the department store made it appear that they were lending money, but they were just actually lending back the money that was deposited to them by the cooperatives, who were then referred to as “borrowers” and “debtors”. Looking back, this would give us the idea that if only these cooperatives could pool their money now as they did before, they could actually do what a department store could do.
I now remember the tale of the “Emperor’s new clothes”, wherein a child in his innocence was the one who “enlightened” everyone about the reality that the Emperor was actually naked. If we could only see now that the workers and their family members are actually the ones who are buying the goods and services from the big stores, we would realize that they are really “naked”, because we are the ones who are keeping them alive by giving them our capital.
I may not be an economist, but I understand well enough that big business in general and big stores in particular make money from the sales of goods and services that they are offering to the customers. Without the sales that are driven by the consumption of customers, these companies could not survive, therefore their corporate lives actually depend on the patronage of these customers. Looking at it from the other side, it is also the patronage of members that keeps the consumer cooperatives alive.
When customers buy from the big stores, they get nothing except some discounts that are few and far between and some miniscule points from the “loyalty cards” that are issued by these stores. On the other hand, when members buy from their own consumer cooperative, they not only get discounts that are generous and are very regular, they also get rebates on a monthly basis, on top of dividends that they get on an annual basis.
The big stores spend a lot of money to win the loyalty of customers, and “loyalty cards” are just one of their many tools. On the other hand, the cooperatives already have the built in loyalty of their members, meaning to say that they need not be won over. Obviously, the few discounts and points that are being offered by the big stores are nothing compared to the big discounts, rebates and dividends that are being offered by the consumer cooperatives.
Unlike the big stores, the consumer cooperatives are also able to offer credit to their members, usually by way of salary deductions against their purchases. On the other hand, the big stores could only offer credit that is charged to credit cards, or the so-called debit cards. By comparison, the credit cards would of course charge interests, whereas the salary deductions are usually interest free.
By definition, “manpower cooperatives” are different from “consumer cooperatives”, but the two could be combined under one registration with the Cooperatives Development Authority (CDA). The other alternative for them is to register as a “multipurpose cooperative” under the CDA, a choice that would enable them to go into other business lines such as credit and transport.
The questions that I asked my wife and daughter were actually just theoretical, because both the “baristas” and their customers could actually join together in one consumer cooperative, in much the same way that the drivers and their passengers could join together in one transport cooperative. That’s also the same for the sales people and their shoppers who could also join together in one cooperative. It is not the same for the workers and their employers, who should not join together in one manpower cooperative, because of conflicts of interests between them.
At the risk of sounding redundant, I would again say that I am not campaigning against the big stores, because they too have a right to do business in a free country that encourages free enterprise. My wish however is for them to stop the practice of “contractualization”, or if they could not do that, my other wish is for them to only engage the services of genuine manpower cooperatives, and not the fake cooperatives that they themselves have created, or the fake cooperatives that were created by some big corporations that are now pretending to be real manpower cooperatives.
If only to console the owners of the big stores who may be disturbed by my writings, I would say that in a free market economy, they would always have their own customers, perhaps among the upper middle class people who would always be attracted to their high end offerings, including their name name brands that are being sold at major major prices. Having said that, I would add another wish, that hopefully they would leave alone the consumer cooperatives that would tend to cater to a lower middle class market, offering only affordable brands along with some quality generic goods.
As I recall, the oppressive practice of “contractualization” was invented by the big business owners who wanted to avoid paying for the long term benefits of regular employees. Under the law, employers are required to “regularize” temporary employees who have worked for them for at least six months. As a way out of this law, many employers engaged the services of employment agencies that would “supply” them the warm bodies that would work for them for less than six months. The expectation was for these agencies to take on the role of hiring these employees as regular workers, in other words giving them the long term benefits that they deserve. Unfortunately, this has not happened at all. Into this picture entered the manpower cooperatives, born along the concept that their members are not employees, therefore there is no employee-employer relationship between the members and their cooperatives. In other words, there are no more requirements to pay them long term benefits.
Just to set the record straight, the “contractualization” practice of the big stores is not illegal, even if it appears to be immoral. Also to set the record straight, the practice of the manpower cooperatives to “contractualize” the provision of services is also not illegal, even if it could potentially become immoral too. The expectation is for these cooperatives to provide their working members with the same benefits that they would have received had they been “regularized”. If they end up not receiving these benefits after all, then the situation would in effect become immoral.
The idea behind manpower cooperatives is to turn a problem into an opportunity, in other words, to turn a bad thing into a good thing, possibly to make it even better. To translate that roughly into real terms, the expectation is for them to stop being victims of the “endo” problem, and to start becoming beneficiaries of the “dividendo” system. In other words, the totality of what they would get from the combination of dividends and rebates is supposed to be equal to, or greater than what they would get in terms of medical benefits and retirement benefits, among many other benefits that they should be getting.
It would be fair to say that working for a manpower cooperative is good enough compared to an employment agency, if the choice is having a job and being jobless. It would however be better to say that employers in general, not just the big stores, should have corporate goals that will aim to progressively increase their ratio of regular employees as opposed to contractual employees. This should be part of their standard practice of good corporate governance. It would be ironic to see companies that are supposedly implementing corporate social responsibility (CSR) programs for external purposes, and yet their internal labor practices are still appearing to be irresponsible. Without going into specifics, it would be fair to say that an imbalanced ratio of contractual employees would affect their productivity.
The author is a broadcast journalist, syndicated columnist, political economist and computer technologist. He was formerly Director General of the National Computer Center and Chairman of the National Crime Information System
By Ramon Ike Villareal Señeres, CESO, CSEE
I told my daughter Lauren that the “baristas” working for our favorite coffee shop are not really employees of that company, and who are in fact “clients” of a third party employment agency that does not give them long term benefits. I took the opportunity to ask her who would be the ideal owners of a cooperative that will go into the coffee shop business. Should it be the customers, or should it be the workers? Her answer was direct to the point. It should be the workers, she said.
I am not an anti-capitalist, because I believe that private capital is needed in order to keep the economy going. For me, it is not a question of what I am against. It is more a question of what I am for. I am for the equalization of access to business, so that more people will have the opportunity to earn profits from their own labor. As I see it, the key to this is the cooperative approach, because it is only through this approach that the private capital of small investors could be pooled together for their common good.
Having started the topic, I asked my daughter and my wife Lorine who had joined the conversation, who would be the ideal owners of a cooperative that will go into the bus transport business. Should it be the drivers, or should it be the passengers? Their answer was the same, it should be the drivers. I was completely fascinated by their answer, which came without hesitation from both of them. Could they be thinking in the same way that most people would think?
I know for a fact that the so-called “manpower cooperatives” are not new in the sense that they have been around for some time. However, I also know for a fact that some of these “manpower cooperatives” are actually fake, in the sense that they are not owned by the workers, and are instead owned by “agents” (or puppets) who are fronting for the real owners who are no other than the actual owners themselves who are simply circumventing the labor laws.
Not wanting to stop while I was ahead, I asked my wife and daughter whether they could imagine a big store that is owned by the salesgirls and the cashiers, instead of the big store chains, and they said yes, adding that it would be a good idea to have that kind of a big store. When I asked them that question, I had in mind the thousands of salesgirls (and salesmen) who are now working for the big stores not as organic employees, but as contractual employees who are hired through employment agencies that are really just acting as their job placement “brokers”.
In theory and in practice, there is actually no employee-employer relationship between the stores and the contractual workers, and neither is there an employee-employer relationship between the employment agencies and these workers. In short, these workers are actually victims of the invisible yet vicious crime of “contractualization”.
Believe it or not, this word “contractualization” is not even in the English language, because apparently, it is only in the Philippines where this word was invented. Quite sadly, it has a translation in the local language that is also not found in any other language. “Endo” is the slang word for “end of contract”, and this word is now also the term used for the sub-culture that has emerged among all the victims of “contractualization”.
The only difference between the contractual employees and the owners of the big stores is that the latter has access to capital. The only difference between the contractual employees and the placement agencies is that the latter has access to information. The placement agencies are actually not creating any value added that should entitle them to their huge fees, because they are merely just brokering on the strength of the information that they have gained access to.
It is not in my place to run after the perpetuators of “contractualization”, because that is the job of the government. I figure that the time I would spend to run after them could better be spent in helping the workers so that they could gain access to both capital and information, two assets that are not too impossible for them to get hold of. Besides, this is a free country where free enterprise is supposed to flourish, so let us just leave the big stores to do their business, even if we have to compete with them if we have to.
Am I out of my mind when I say that we could compete with the big stores? When I say “we”, I actually mean the workers who could possibly pool together their small capital in order to invest in big businesses. Maybe I am not really out of my mind, because this small capital actually exists among the workers, if they would only know how to put it aside for a good purpose. I actually know that I am not out of my mind, because I also know that these workers and their family members are the same people who are now buying goods and services from these big stores.
Many years ago, one of the big stores offered a “credit line” to the consumer cooperatives, provided that they would back this up with a deposit that would correspond in value to their supposed “credit line”. We could presume for purposes of discussion that that department store was probably acting in good faith when it extended the offer, and that the cooperatives that took on the offer probably acted on good advice, at least at that time.
Going fast forward to the present times, many banks are now offering “credit cards” that are secured with an equivalent amount in deposits. We could just be talking about a play of words here, because what the banks are actually offering are “debit cards” and not “credit cards”. Recently, a new twist has come to the play of words, because some of the banks are now issuing “cash cards” or “money cards” that are secured not by “deposits”, but by “loads” or “reloads” as the case may be.
Going back to the “credit line” that was offered by that department store to the cooperatives, it would appear that the former simply cooked the latter in their own lard, because the department store made it appear that they were lending money, but they were just actually lending back the money that was deposited to them by the cooperatives, who were then referred to as “borrowers” and “debtors”. Looking back, this would give us the idea that if only these cooperatives could pool their money now as they did before, they could actually do what a department store could do.
I now remember the tale of the “Emperor’s new clothes”, wherein a child in his innocence was the one who “enlightened” everyone about the reality that the Emperor was actually naked. If we could only see now that the workers and their family members are actually the ones who are buying the goods and services from the big stores, we would realize that they are really “naked”, because we are the ones who are keeping them alive by giving them our capital.
I may not be an economist, but I understand well enough that big business in general and big stores in particular make money from the sales of goods and services that they are offering to the customers. Without the sales that are driven by the consumption of customers, these companies could not survive, therefore their corporate lives actually depend on the patronage of these customers. Looking at it from the other side, it is also the patronage of members that keeps the consumer cooperatives alive.
When customers buy from the big stores, they get nothing except some discounts that are few and far between and some miniscule points from the “loyalty cards” that are issued by these stores. On the other hand, when members buy from their own consumer cooperative, they not only get discounts that are generous and are very regular, they also get rebates on a monthly basis, on top of dividends that they get on an annual basis.
The big stores spend a lot of money to win the loyalty of customers, and “loyalty cards” are just one of their many tools. On the other hand, the cooperatives already have the built in loyalty of their members, meaning to say that they need not be won over. Obviously, the few discounts and points that are being offered by the big stores are nothing compared to the big discounts, rebates and dividends that are being offered by the consumer cooperatives.
Unlike the big stores, the consumer cooperatives are also able to offer credit to their members, usually by way of salary deductions against their purchases. On the other hand, the big stores could only offer credit that is charged to credit cards, or the so-called debit cards. By comparison, the credit cards would of course charge interests, whereas the salary deductions are usually interest free.
By definition, “manpower cooperatives” are different from “consumer cooperatives”, but the two could be combined under one registration with the Cooperatives Development Authority (CDA). The other alternative for them is to register as a “multipurpose cooperative” under the CDA, a choice that would enable them to go into other business lines such as credit and transport.
The questions that I asked my wife and daughter were actually just theoretical, because both the “baristas” and their customers could actually join together in one consumer cooperative, in much the same way that the drivers and their passengers could join together in one transport cooperative. That’s also the same for the sales people and their shoppers who could also join together in one cooperative. It is not the same for the workers and their employers, who should not join together in one manpower cooperative, because of conflicts of interests between them.
At the risk of sounding redundant, I would again say that I am not campaigning against the big stores, because they too have a right to do business in a free country that encourages free enterprise. My wish however is for them to stop the practice of “contractualization”, or if they could not do that, my other wish is for them to only engage the services of genuine manpower cooperatives, and not the fake cooperatives that they themselves have created, or the fake cooperatives that were created by some big corporations that are now pretending to be real manpower cooperatives.
If only to console the owners of the big stores who may be disturbed by my writings, I would say that in a free market economy, they would always have their own customers, perhaps among the upper middle class people who would always be attracted to their high end offerings, including their name name brands that are being sold at major major prices. Having said that, I would add another wish, that hopefully they would leave alone the consumer cooperatives that would tend to cater to a lower middle class market, offering only affordable brands along with some quality generic goods.
As I recall, the oppressive practice of “contractualization” was invented by the big business owners who wanted to avoid paying for the long term benefits of regular employees. Under the law, employers are required to “regularize” temporary employees who have worked for them for at least six months. As a way out of this law, many employers engaged the services of employment agencies that would “supply” them the warm bodies that would work for them for less than six months. The expectation was for these agencies to take on the role of hiring these employees as regular workers, in other words giving them the long term benefits that they deserve. Unfortunately, this has not happened at all. Into this picture entered the manpower cooperatives, born along the concept that their members are not employees, therefore there is no employee-employer relationship between the members and their cooperatives. In other words, there are no more requirements to pay them long term benefits.
Just to set the record straight, the “contractualization” practice of the big stores is not illegal, even if it appears to be immoral. Also to set the record straight, the practice of the manpower cooperatives to “contractualize” the provision of services is also not illegal, even if it could potentially become immoral too. The expectation is for these cooperatives to provide their working members with the same benefits that they would have received had they been “regularized”. If they end up not receiving these benefits after all, then the situation would in effect become immoral.
The idea behind manpower cooperatives is to turn a problem into an opportunity, in other words, to turn a bad thing into a good thing, possibly to make it even better. To translate that roughly into real terms, the expectation is for them to stop being victims of the “endo” problem, and to start becoming beneficiaries of the “dividendo” system. In other words, the totality of what they would get from the combination of dividends and rebates is supposed to be equal to, or greater than what they would get in terms of medical benefits and retirement benefits, among many other benefits that they should be getting.
It would be fair to say that working for a manpower cooperative is good enough compared to an employment agency, if the choice is having a job and being jobless. It would however be better to say that employers in general, not just the big stores, should have corporate goals that will aim to progressively increase their ratio of regular employees as opposed to contractual employees. This should be part of their standard practice of good corporate governance. It would be ironic to see companies that are supposedly implementing corporate social responsibility (CSR) programs for external purposes, and yet their internal labor practices are still appearing to be irresponsible. Without going into specifics, it would be fair to say that an imbalanced ratio of contractual employees would affect their productivity.
The author is a broadcast journalist, syndicated columnist, political economist and computer technologist. He was formerly Director General of the National Computer Center and Chairman of the National Crime Information System
posted by Ike Señeres at 5:33 PM
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