Cost of Living of Pedicab Drivers in San Mateo

During the Inflation Rate

In Fulfillment of the Requirements for Senior

High School In Line With Practical

 Research I

STUDENTS NAME

CAILING, SHANNA RAE L.

PEREZ, ANGELICA B.

ALAYAN, DANICA V.

CUSTODIO, MHAE M.

ARADOR, KENARD T.

ALIMORONG, EDITHA ROSE

RAMOS, BENEDICT JOSEPH C.

 THE PROBLEM

Introduction

        

Pedicabs are an essential component of the transportation mix and a

practical alternative to private vehicles, taxis, and public transportation. Pedicab

drivers typically base their prices on the length of the trip, how long it takes, or

both. Per-block fees are typical in cities with regular street grids. The earning

potential mostly depends on the fare schedule, fee structure, and shift-specific

environmental considerations.

The Pedicab Drivers are one of the minimum-wage workers who were

greatly affected by the constant inflation rate. The pedicab is the transportation

we use everyday that covers short distances. However, there are hindrances that

pedicab drivers experience. One of the problems facing pedicab drivers was

dealing with the inflation rate. Inflation is a persistent increase in the general

price level of goods and services. ( Floyd, 2023 )

In the first quarter of the year, inflation continued its uptrend as it

accelerated further to 8.7 percent in January 2023, from 8.1 percent in December

2022. January 2023 inflation is the highest annual rate. In other words, January

2023 had the higher annual rate. In other words, in January 2022, the higher

year-on-year increase in the index of housing, water, electricity, gas, and other

will be 8 fuels waste  7.0 percent in December 2022. This was followed by food

and non-alcoholic beverages at 10.7 percent, from percent, downcent in December

2022. Restaurants and accommodation services saw an inflation rate of 7.6 percent
in January 2023, up from 7.0 percent in December 2022. Food inflation in the

United States increased to 11.2 percent in January 2023, up from 10.6 percent in

December 2022 and 1.6 percent in January 2022. Pedicab drivers are  particularly

sensitive to the effects of an increase in the inflation rate, the cost of their

leaving also increases. This study explore the effects of inflation rate to the

minimum wage earners such as pedicab drivers, highlighting the challenges that

they face in coping with risky cost. (PSA, 2023)

In view of the above, the researchers want to identify the variables

affecting the pedicab drivers of San Mateo’s daily revenue and potential solutions to

address their issues. The present study concentrated on pedicab drivers of San

Mateo. The difficulties pedicab drivers faced on a daily basis were something the

researchers were interested in learning about.

Statement of the Problem

This study seeks to determine the factors that influence the inflation rate

for pedicab drivers.

     Specifically, it answers the following questions:

1. . What is the daily income of pedicab drivers?

2.  What are the effects of the inflation rate on the basic commodities of

pedicab drivers?

3.  How does the inflation rate of basic commodities affect the cost of living

of the pedicab drivers?

4. How do pedicab drivers cope with the rising rate of inflation?

         Scope and Delimitation

This study seeks to determine the factors that influence the inflation rate

for pedicab drivers. The researchers will examine the effects of the inflation

rate on minimum wage workers, specifically pedicab drivers. This study will

cover inflation rate, the ability to purchase, the standard of living, and

overall well-being. It will also analyze the possible solutions that can be

implemented to mitigate the negative effects of inflation on the said

workers. This topic will focus solely on the inflation rates, four basic

commodities, and its effect on minimum wage workers, particularly the

pedicab drivers of Barangay San Mateo, Camaligan, Camarines Sur. For the

reason that it will help those pedicab drivers of Barangay San Mateo who's

having a hard time dealing with the inflation rate. It will not revolve

around the factors that may affect their livelihood, such as government

policies or economic downturns. Moreover, this topic will only cover the

inflation rates in the 1st quarter of the year 2022 and its impact on a

specific group of minimum wage workers. It will not provide a

comprehensive analysis of the broader economic implications of inflation.

Significance of the Study

This research aims to provide information regarding the impacts of inflation

rate to pedicab drivers of Barangay San Mateo, Camaligan, Camarines Sur. The

knowledge of this will help those pedicab drivers who are having a hard time or

suffering with the said problem, which is the inflation rate. The study was

considered beneficial to pedicab drivers and future researchers.

 It is expected that this study will benefit the following individuals:

 Pedicab Drivers.  This study will be beneficial to the pedicab drivers to

know and understand the impact of inflation rate on their lives.

Students.  This study may serve as a guide and reference for the students

since pedicab  is one of the transportation that is used. It will also give

understanding about how to control their behavior and attitude about the issue.

Future Researcher.  It would help the future researchers that are also

interested to this study. This can be significant tool for their future activities in

research.

Local Government Unit (LGU).  This study will also be beneficial for the

LGU because it may be used as a basis in providing programs intended to help

our pedicab drivers.

Families. This study will be also beneficial for the family of the respondent. It

may also give them understanding of the impact of inflation rate on their daily lives.

Definition of Terms

For the purpose of clarification, the important terms used in this study have been

defined.

Cost of Living. It refers the cost of purchasing those goods and services

which are included in an accepted standard level of consumption. In this study, it

refer to the amount of money needed to cover basic expenses such as housing,

food, taxes, and healthcare in a certain place and time period.

 Minimum Wage. It is the lowest wage paid or permitted to be paid. In

this study, it refers to the wage earners that the employees pay after the given

period.

Workers. It refers to one that works especially at manual or industrial

labor or with a particular material. In this study, it refers to the people who earn

the minimum amount of the income.

Pedicab Drivers. It refers to the people that are responsible for delivering

riders safely to their destination. In this study, it refers to the person who earn

minimum amount of income to provide their basic commodities.

Inflation Rate. In economics, inflation is an increase in the general price

level of goods and services in an economy. When the general price level rises,

each unit of currency buys fewer goods and services; consequently, inflation

corresponds to a reduction in the purchasing power of money. In this study, it

refers to the effect for the pedicab drivers.

Basic Commodities. It refers to the good used in commerce that is

interchangeable with other goods of the same type, and these are often used as

inputs in the production of other goods and services. In this study, it refers the

basic goods that the pedicab drivers purchase from their earnings.
 CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the related literature and studies from local and international sources about

the challenges of minimum wage workers during the inflation rate which served as guide and basis for

analysis and interpretation of the result. This would also present the theoretical framework and the

conceptual framework to fully understand the study.

According to Dube (2019), this renewed attention also echoes an increasing consensus

among policy makers and academics that, at the level set in most OECD countries, minimum

wage increases (even large ones) have had a positive effects on low incomes but no or limited

negative effects on employment. This policy brief discusses the functioning of minimum wages

across OECD countries, their role in preserving the purchasing power of the low paid as well as

their interactions with the tax-benefit systems. The role of working-age benefits in the current

juncture is the focus of another policy brief (OECD, 2022) while a third one focuses on the

challenges for the pension systems (OECD, 2022).

As said by Kenton (2022), As the cost of goods and services rises at the companies

paying higher wages and in the broader market overall, the wage increase is not as helpful to

employees, since the cost of goods in the market has also risen. If prices remain increased,

workers eventually require another wage increase to compensate for the cost of living increase.

The percentage increase of the wages and prices and their overall effect on the market are key

factors driving inflation in the economy. ( Kenton 2022)

According to Pablo Acosta (2022), as the COVID-19 pandemic began to ease its effects

on households across the globe, another crisis started searing: inflation. The costs of food and

fuel began rising as early as the second half of 2021 in many countries in the world. By mid-
2022, annual inflation was estimated at 9.8 in Europe, 8.5 in the US, and 13.9 in Brazil. Inflation

for the LAC region for 2022 is forecasted at 12.1. Hiking prices lead to loss of purchasing power

of households and food insecurity. In Brazil, the costs of food increased by 13.43 percent in the

12 months to August 2022, and the foodstuff consumed at home by 15.63 percent. The effects on

such items – which represent between a fifth and a quarter of household’s consumption- were

only partly appeased by the increase in nominal average labor incomes in 2022. Thus, food

insecurity is estimated to have gone up in 2022, with a projected 15.5 % of households in severe

food insecurity, compared to the 9 percent in 2020. It is against this backdrop that we arrive at

another International Day for the Eradication of Poverty, also commonly known as End Poverty

Day (October 17th). As the real value of households’ income deteriorates, they can afford to

purchase fewer things. Ultimately, the accurate monitoring of countries’ progress towards

eradicating poverty rests on our ability to measure whether the population can cover their basic

needs.

As stated by Tami Luhby (2021), the wage hit its peak in inflation-adjusted terms in 1968

at just over $12. Though it has been raised 14 times since then, it has not kept pace with the cost

of living. The current nearly 12-year stretch is the longest it’s gone without a boost. That means

minimum wage workers are getting poorer over time, said Josh Bivens, director of research at

the left-leaning Economic Policy Institute.

Depending to Konish (2009), Minimum wages can have a strong impact on wages at the

bottom of the distribution and help preserving the purchase power of low-paid workers.

Especially in times of high inflation, minimum wages need thus to be regularly revised to ensure

that they maintain their usefulness as a policy instrument, as indicated in the OECD Employment

Outlook 2022. Although high uncertainty and slowing economic growth may suggest caution in
raising minimum wages, margins exist in several OECD countries to adapt, at least partially, the

existing level of the statutory minimum wage so as to protect those workers who are most

exposed to the increase in prices, especially given the substantial monopsony power that low

wage labour markets have in most OECD countries. However, it is important to consider

carefully both the economic and social effects of minimum wages adjustments and consult social

partners and other stakeholders as trade-offs may be amplified by uncertainty, tight labour

markets and inflation. In such a context, promoting minimum wage adjustments that are

transparent and predictable for both business and workers is crucial. However, minimum wages,

either statutory ones or negotiated ones, should be seen as part of a broader policy package. To

be more effective, it is essential that minimum wage policies be co-ordinated with tax and benefit

policies in order to ensure that increases in the statutory value of the minimum wage translate

into higher take-home pay while limiting the rise in labour costs for employers. This is even

more important in the current juncture, when governments have put in place a large range of

subsidies and transfers.

THEORETICAL FRAMEWORK

To support the objective of the study, theories and methods were utilized which explained

the relationships of variables involved in the investigation. Figure 1 shows the theoretical

framework of the study. It shows the theories that explain the cost of living of the minimum

wage workers which include The Keynesian Theory of Cost-push Inflation as the main theory

and supported by Demand-pull Inflation and Built-in Inflation theories.

 The Neoclassical Economic Theory cited by Robert Solow and Trevon Swan (1956)

predicts that higher minimum wages will lead to lower employment. This may happen for two

reasons: firstly, because minimum wages may force enterprises to raise the prices of their goods

and services, and consumers or international buyers who face higher prices may therefore cut

back on their demand (the so-called “scale effect”). Secondly, when low-wage workers become

more “expensive” due to the minimum wage, firms may decide to replace some of them with

more machines and a few skilled workers to operate these (the “substitution effect”).

Neoclassical economists believe that a consumer's first concern is to maximize personal

satisfaction, also known as utility. Therefore, they make purchasing decisions based on their

evaluations of the utility of a product or service. If these effects are large, aggregate employment

levels of low-wage workers may decline. There is also likely to be a “cross-industry” effect, as

employment is predicted to fall in labour-intensive industries, where the proportion of low-paid

workers is higher and where labour costs represent a high proportion of total production costs for

enterprises. In other industries, employment may remain unchanged or may even increase, as

consumers spend more of their money on goods and services where prices are less affected by

minimum wages.

In this study, the Neoclassical Economic Theory supports the third statement of the

problem that the pedicab drivers are encountering during the inflation rate.

Another theory that supports the study is the Macro-economic theory cited by John

Maynard Keynes (1936). This highlights the fact that higher wages not only raise labour costs for

employers, but they also increase consumption demand among the low-paid workers and their

families. Assuming there are no large negative effects on external competitiveness (which might

be the case for very export-oriented economies) or investment, such positive “consumption
effects” can lead to increases in aggregate demand and employment. Macro-economic

perspectives show that even if some low-productivity firms reduce employment or go out of

business, this does not necessarily mean that aggregate employment will be reduced.

Employment may expand in other firms and higher wages may attract more people into the

labour market.

The figure shows the importance of identifying the effects of inflation on minimum-wage

workers. Because it investigates the factors that influence general output and income in a society,

as well as the consequences of price levels such as inflation and unemployment.

The last theory that supports the study is Keynesian Economic Theory cited by John

Maynard Keynes (1936). This model highlights the overall demand could lead to prolonged

periods of high unemployment. An economy’s output of goods and services is the sum of four

components: consumption, investment, government purchases, and net exports (the difference

between what a country sells to and buys from foreign countries). Any increase in demand has to

come from one of these four components. But during a recession, strong forces often dampen

demand as spending goes down. For example, during economic downturns uncertainty often

erodes consumer confidence, causing them to reduce their spending, especially on discretionary

purchases like a house or a car. This reduction in spending by consumers can result in less

investment spending by businesses, as firms respond to weakened demand for their products.

This puts the task of increasing output on the shoulders of the government. According to

Keynesian economics, state intervention is necessary to moderate the booms and busts in

economic activity, otherwise known as the business cycle.

Neoclassical Economic Theory

Robert Solow and Trevon Swan (1956)

A cross-industry effect, as employment is expected to

reduce in labor-intensive industries, where the number of
low-wage
 COST OF LIVING OF
PEDICAB DRIVERS

MACRO-ECONOMIC THEORY KEYNESIAN ECONOMIC THEORY

John Maynard Keynes (1936) John Maynard Keynes (1936)

employment may remain This reduction in spending by

unchanged or may even increase, as
consumers spend more of their
money on goods and services where
prices are less affected by minimum
wages.
consumers can result in less investment
spending by businesses, as firms
respond to weakened demand for their
products. This puts the task of
increasing output on the shoulders of
the government.

CONCEPTUAL FRAMEWORK
 Figure two (2), displayed the conceptual framework where the design used is input,

process, and output.

The input was composed by the pedicab driver’s profile, the respondent’s daily income,

the effects of inflation rate on their basic commodities, the ways on how pedicab drivers cope

with the rising inflation rate, and the other source of income.

As to the process, the researchers will use the survey questionnaires and statistical

treatment.

For the output, the researchers will address the solution for the impact of inflation

towards minimum-wages on earnings and track the household incomes of pedicab drivers.
 COST OF LIVING OF PEDICAB DRIVERS IN SAN MATEO

DURING THE INFLATION RATE

CAMALIGAN NATIONAL HIGH SCHOOL, CAMALIGAN,

Profile of the Pedicab CAMARINES SUR

Drivers in terms of:
a. Age Address the
b. Gender Survey solution for the
c. Type of Questionnaire
Residue
impact of inflation
d. Daily income towards minimum
e. Daily expense wages on earnings
f. Ways on how Statistical and track the
pedicab
Treatment household incomes
drivers cope
with the of pedicab drivers
inflation

The input of the study contains the Statement of the

Problem. An example of a process that the researchers will
use is a Survey Questionnaire and Statistical Analysis of
data . The outcome of the study will benefit the pedicab
drivers to address the solution to the said problem..

CHAPTER III
METHODS AND PROCEDURE

This chapter contains the research design, the respondents, the data gathering tools and the

statistical treatment used in analyzing the gathered data.

METHODS USED
The chapter starts off by providing a comprehensive introduction to research. Then the

research approaches and research methods utilized in information systems are covered in detail.

comparing the changes in the inflation rate with the changes in the minimum wage over a

specific period. This analysis can help identify any correlation or disparity between the two

variables. If the minimum wage remains stagnant while the inflation rate rises, it indicates a

potential negative impact on the purchasing power of pedicab drivers.

Calculate the real wage by adjusting the nominal wage for inflation. The real wage

represents the purchasing power of the workers' income after accounting for changes in prices.

By comparing the real wage over time, you can determine whether the minimum wage has kept

pace with or lagged behind inflation.

Construct a cost of living index specific to San Mateo by considering essential expenses

for pedicab drivers, such as housing, transportation, food, healthcare, and education. Monitor

changes in this index alongside the inflation rate to assess how well the minimum wage supports

the basic needs of the workers.

Conduct surveys or interviews with pedicab drivers to understand their perception of the

effects of inflation on their livelihoods. Questions can focus on their ability to afford necessities,

cope with rising prices, and maintain their standard of living. Qualitative data gathered from

these methods can provide insights into the lived experiences of the workers.

Perform in-depth case studies on individual pedicab drivers to examine how their income,

expenses, and overall financial situation have been affected by inflation. This method allows for

a detailed analysis of the specific challenges and coping strategies employed by pedicab drivers

in response to inflation.
 Use economic models to simulate the effects of different inflation scenarios on the

minimum wage workers. These models can help estimate the potential impact of inflation on the

drivers' income, savings, and overall economic well-being.

RESPONDENTS OF THE STUDY

The respondents are selected based on a purposive sampling method, it is conducted with

the least interference to the participants. Generally, the respondents are selected from the

terminal located at San Mateo, Camaligan, Camarines Sur. The research is managed by the 11

Accountancy Business Management from Camaligan National High School, Camaligan District

for school year 2022-2023.

DATA GATHERING INSTRUMENTS

The survey-questionnaire are the data gathering tools for the study. The questionnaire is adapted

and modified from their teacher in research from Camaligan National High School. The tool determines

the expenses of the pedicab drivers and identifies the effects of inflation rate to the basic commodities of

pedicab drivers. The survey-questionnaire ensures that the question will determine how pedicab drivers

handling the rising inflation rate that occured. To improve the reliability and validity of the data there will

be an item analysis index of the question as basis. The first part of the instrument gathers the demographic

profile of the respondents while second part is the mode of ownership of the pedicab being used, the third

part are the essential or basic commodities that pedicab drivers purchase everyday, fourth part the rating

scale and the last part or the fifth part of the survey-questionnaire, the possible effect to the pedicab

drivers during inflation rate and the respondents which is the pedicab drivers will put a check on it.

PROCEDURE OF THE INVESTIGATION

For the reliability and validity of the results, the study will follow the steps in the

gathering of data. Preparation of the instruments. The research instrument that was used in

the conduct of the study is a survey-questionnaire to determine the expenses of the pedicab
drivers. To identify the effects of Inflation Rate to the basic commodities of pedicab drivers

and How does the pedicab drivers cope with the rising inflation rate. To ensure the validity

of the survey-questionnaire, the method will be administered at the same instrument to the

same sample at different points in time. Securing permit to conduct the study. The letter of

request address to the Pedicab Drivers will be prepare to permit the distribution of the

survey-questionnaire. Administration of the questionnaire. After the approval of the request

to conduct the study, the questionnaire will be administer to the pedicab drivers as the

respondents.

STATISTICAL TREATMENT

To facilitate the analysis and treatment of the data, the following statistical tools will be

use: Frequency and Percentage. This tool will determine the frequency and percentage

distribution involves in identifying the total number of observations to be presented in counting

the total number of observation in each data group. The formula is:

p = f / N × 100 N

Where,

P= percentage

f= frequency

N= number of respondents

Mean. This Statistical tool will be use to know the average daily income of the pedicab drivers.

The formula:

x̅ = Σ̅X / N Where,
X= score

N= total number of scores