THE Employers Confederation of the Philippines (ECOP) warned that a minimum wage increase will only benefit about 7-8% of the work force and subject them to a greater risk of layoffs from small firms that cannot afford to pay higher salaries.
The organization issued the warning after the Trade Union Congress of the Philippines (TUCP) said it will push for a P320 increase in the minimum wage in the National Capital Region for private-sector workers.
ECoP Acting President Sergio R. Ortiz-Luis, Jr. said in a phone interview with BusinessWorld that only 7 to 8% of the 43 million people in the labor force are minimum-wage earners and a P320 wage increase will not be beneficial to most workers since they are not covered by the wage adjustment.
“If you file for a P320 increase a day, assuming it gets approved, it means the 93% won’t have higher salaries,” Mr.Ortiz-Luis said.
Mr. Ortiz-Luis also said that most companies are Micro, Small and Medium Enterprises which may not be able to deal with wage increases of the magnitude being proposed, while also raising the possibility of strengthening inflation.
“Small companies only have two choices when there is a wage increase. If they can raise prices they will, and that causes inflation. If they cannot, they will reduce their personnel,” he said.
In a message to BusinessWorld on Monday, Associated Labor Unions (ALU)-TUCP Spokesperson Alan A. Tanjusay said TUCP filed a wage hike petition in June with the Regional Tripartite Wage and Productivity Board (RTWPB) for P320, which if granted will push the current daily wage in NCR to a little over P800.
“We filed for P320 to add to the current wage rate and push the current rate to P800. NEDA (National Economic and Development Authority) said the amount needed by a family of five to live decently in one day is P1,400. To get near this P1,400, we deemed it pragmatic and affordable for employers to set the wage at P800 level,” Mr. Tanjusay said.
NEDA Secretary Ernesto M. Pernia was quoted in June as saying that a family of five needs P42,000 a month in order to maintain a standard of living deemed “decent,” which is approximately P1,400 a day.
Also in June, ECoP put forward a motion to dismiss TUCP’s wage hike petition at the NCR-RTWPB because TUCP filed it less than 12 months since the NCR’s last wage order.
Wage boards can only entertain wage petitions after a region’s wage order hits its one-year mark. The NCR’s last wage order took effect on Oct. 5, 2017, bringing the NCR daily minimum wage to P475 for agricultural and P512 for non-agricultural workers.
TUCP President Raymond C. Mendoza said in a statement on Monday that the union will meet with President Rodrigo R. Duterte on Oct. 9 to discuss how to address the impact of inflation on workers.
“If given a chance, we will urge President Duterte to act on the TUCP P320 wage increase across the board bill filed at the House of Representatives and order the regional wage board to adjust the minimum wage rates of minimum wage earners nationwide,” he said.
Special Assistant to the President Christopher Lawrence T. Go said in a message to reporters that there is no confirmed meeting with TUCP.
“There is no meeting with TUCP,” he said.
Mr. Mendoza, who is also the TUCP Partylist Representative at the House of Representatives, filed House Bill 7805 or “The Living Wage Act of 2018” which provides a P320 wage increase in all regions.
Last month, Department of Labor and Employment (DoLE) secretary Silvestre H. Bello III estimated that the wage adjustment for the NCR will be at least P20.
Mr. Tanjusay said that TUCP’s counter-offer won’t go below P80, adding “Employers are haggling for a P20 wage hike. Our counter offer is that we will not accept the P20. Our final counter offer is P80.”
When asked why TUCP will settle for a minimum of an P80 wage adjustment, Mr. Tanjusay said, “This is the amount in our computation that small enterprises can afford to give to workers.”
IBON Foundation Executive Director Sonny A. Africa said in a briefing on Monday that he prefers a P27 wage increase for minimum wage earners if the minimum wage is to retain the value it had when the year started.
“We think that the population, in order to cope with the high prices since the start of this year, should have a P27 wage hike so that the value of the minimum wage will be restored,” Mr. Africa said.
NCR-RTWPB Workers Representative German N. Pascua Jr., a lawyer, said in a mobile message to BusinessWorld that the board will have a consultation with the labor sector on Oct. 22 and the business sector on Oct. 24.
“Public hearing (will be on Oct.) 26,” he added, saying both labor and management sectors will be present at the hearing.
Section 3 of Republic Act 6727 or “Wage Rationalization Act.” states that a regional wage board “shall conduct public hearings and consultations giving notices to employees’ and employers’ groups, provincial, city and municipal officials and other interested parties” during the process of wage fixing. — Gillian M. Cortez
