And this is our project, The Balancing Act: Exploring the Relationship of Wages and the Cost of Living in the Philippines. It studies the expenses and income of Filipinos and aims to identify if the minimum wage of Filipinos is enough to cover their cost of living.
Data Science Team
Price increase on food, transportation, rent, and other living costs are inevitable. However, it is hard for citizens to keep up with these increases when the same isn't happening to their income. This research aims investigate whether there is injustice in our economic state.
Research Question: What is the relationship between the cost of living and wages of Filipinos.
Secondary Research Question: What should be the minimum wage based on current cost of living?
Null Hypothesis: The minimum wage is enough to cover the cost of living in the Philippines.
Alternative Hypothesis: The minimum wage is not enough to cover the cost of living in the Philippines.
This research will analyze the cost of living of Filipinos by looking at the poverty threshold and compare it to the minimum wage in the Philippines.
In this research, we define cost of living as the amount of money a person needs to spend to cover basic expenses such as housing and food. For this data, we used the Poverty Threshold data from the 2009, 2018, and 2021 editions of the Official Poverty Statistics of the Philippines from the Philippine Statistics authority (PSA). Since the full year data for 2023 is not yet currently available, and the Family Income and Expenditure Survey, which is the survey used to obtain data for the Official Poverty Statistics, is only done every three years, the 2021 data is the most recent data available. The PSA defines poverty threshold as the monthly minimum income reqiured for a family/individual to meet the basic food and non-food requirements which fits our definition for cost of living. In addition to this, we also considered the food threshold data which is the minimum income required for a family/individual to meet the basic food needs.
For the minimum wage, we used the summary of daily minimum non-agriculture wage rates per wage order by region from the National Wages and Productivvity Commission of the Department of Labor and Employment. We will then be multiplying these values by 293, which is the number of ordinary working days according to the Handbook of Workers' Statutory Benefits 2023 edition by the Department of Labor and Employment Bureau of Working Conditions, and divided by 12 months to get the Estimated Equivalent Monthly Rate of minimum wage earners.
Exploratory Data Analysis
In order to make our data consistend, we did some scaling on the poverty and food threshold. Instead of using the data directly from PSA, which was in pesos per month,we divided it by 30 to make it per day. This would match our mimimum wage data, which is also per day. In addition to this, since our minimum wage data is taken per region, we took the average of the poverty threshold of each provinces per region. This gave us a poverty threshold per region that we can compare with the minimum wage.
We used python to visualize our data. Explore our graphs here.
Null Hypothesis: The minimum wage is enough to cover the cost of living in the Philippines.
Alternative Hypothesis: The minimum wage is not enough to cover the cost of living in the Philippines.
Linear regression is used to get the slope of the poverty threshold and minimim wage through the years. The z-test is then used to test the equality of the two regressions. The z-score from the z-test is 22.9608 which indicates a very strong deviation from the null hypothesis; and the p-value is extremely small, indicating that the null hypothesis is unlikely to be true.
The z-score of approximately 21.9608 is extremely high. This tells us the regression slopes of minimum wage and poverty threshold has a substantial difference.
The p-value of approximately 3.4126x10-107 is extremely small. This tells us the the probability of observing the result under the null hypothesis is extremely low and that there is great significance in their observed difference.
Because of this, the null hypothesis is rejected. The alternative hypothesis- The minimum wage is not enough to cover the cost of living in the Philippines, is taken to be true due to the values of the cost of living being extremely greater than that of the minimum wage.
The z-score of approximately 21.9608 is extremely high. This tells us the regression slopes of minimum wage and poverty threshold has a substantial difference. The p-value of approximately 3.4126x10-107 is extremely small. This tells us the the probability of observing the result under the null hypothesis is extremely low and that there is great significance in their observed difference. Because of this, the null hypothesis is rejected. The alternative hypothesis- The minimum wage is not enough to cover the cost of living in the Philippines, is taken to be true due to the values of the cost of living being extremely greater than that of the minimum wage.
Hi! I'm Juni Maca and I'm a 2nd year BS Computer Science student at University of the Philippines - Diliman. I'm interested in programming, game development, IT, and in particular data science! I enjoy listening to K-Pop and binge-watching YouTube videos in my free time.
Hello! I'm Julian Yabut and I am a 2nd year UPD computer science major. I enjoy tinkering with gadgets which include my computer, speakers and any electronics I can get my hands on. Other than that, I like listening to music mostly local bands, and I enjoy playing bass as well.
Hello! I'm Bianca Amurao, a 2nd year BS Computer Science Student in UP Diliman. I like computers and I enjoy programming and web development. Away from the keyboard, I also like to dabble in art and design.