Employers offer P20 minimum wage hike

An employers group finds “acceptable” a P20 increase in daily minimum wage for workers in Metro Manila, an amount that is way below the P344 that a labor group is seeking to allow them to recover lost purchasing power.

The Employers Confederation of the Philippines (Ecop) cautioned against a significant pay increase, saying it would further jack up prices of goods and result in the closure of several businesses and loss of jobs for thousands.

Ecop made known its stand during the second consultation meeting conducted on Wednesday by the Regional Tripartite Wage and Productivity Board, which is hearing the petition for the P344 wage increase filed by the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP).

While workers in the metropolis enjoy the highest daily minimum wage in the country at P512, its value has since eroded to just P340, ALU-TUCP said earlier.

The labor group pointed out that a P344 increase would help workers recover the purchasing power lost to inflation, which reached 6.2 percent in the third quarter.

Consumer burden

Ecop said workers might not even feel a significant adjustment because businesses would be forced to pass on the additional cost to consumers.

“If we increase the wages and the inflation rate goes down, will the wages also go down? I don’t think it is a good basis for increasing wages,” Ecop governor Antonio Abad said. “There must be other factors for increasing wages.”

Abad said high inflation should not be the sole basis for determining the wage increase, noting that inflation was “fluctuating and temporary in nature.”

In September, inflation rose to a fresh nine-year high of 6.7 percent. Among all regions, it was only in Metro Manila where inflation slightly eased to 6.3 percent from 7 percent in August.

Abad said an acceptable wage increase would be P20, echoing Labor Secretary Silvestre Bello III’s earlier estimate.

The other 43M workers

The Joint Foreign Chambers of Commerce in the Philippines (JFC) warned that giving an increase to some 2 million workers earning basic pay in Metro Manila would have “unintended consequences” to the 43 million other workers in the country.

JFC’s Ernie Cecilia said investors and businesses might opt to transfer operations to other countries in Southeast Asia.

“The problem is not the low wages but poverty and unemployment. It’s a vicious cycle. If we really want to help [minimum wage earners], increasing wages is not the solution because doing so would have an inflationary effect,” Cecilia said.

He added that the cost of putting food on the table should be brought down.

‘Scare tactics’

ALU-TUCP spokesperson Alan Tanjusay said employers should stop resorting to “scaremongering tactics” to counter its wage demand.

Tanjusay said it was wrong to say that the minimum wage in the Philippines was one of the highest in the region because conditions and the cost of living in neighboring countries were different.

Companies should not use the pay demand of  workers as an excuse to increase the price of goods, he said. “They should invest in their workers,” he said.

The wage board, chaired by the Department of Labor and Employment, may come out on Friday with its decision on the amount of wage adjustment.

Over the last few months, other boards across the country only gave daily minimum wage increases ranging from P9 to P56.