Labor coalition presses for legislated wage hike

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A broad alliance of labor groups on Wednesday urged Congress to pass a law raising the salaries of the country’s more than four million minimum wage earners who continue to grapple with rising prices of food and other basic commodities.

While it welcomed the wage review order from the Department of Labor and Employment (Dole), the Nagkaisa Labor Coalition said Congress should take action as well because it “holds the power to legislate wage hikes and better employment programs.”

It added that this should be the government’s response, especially when “the national objective is not only about mitigating the impacts of inflation… but most importantly, on raising the standard of living of the working class.”

Another labor group, Partido Manggagawa, lobbied for Congress to legislate a P100 increase across the board in response to rising inflation, which measures the average increase in the prices of food and essential services such as electricity and water.

Inflation surged to a 14-year high of 7.7 percent in October due to higher prices of food items, particularly vegetables and fish as a result of the damage caused by a series of typhoons that recently hit the country.

Labor Secretary Bienvenido Laguesma said on Tuesday that the regional wage boards have started to look into whether the country’s high inflation rate, the prolonged pandemic, and the impact of the recent typhoons could merit another round of salary increases for minimum wage earners.

This, however, might take a while because of existing rules that wage orders should not be amended within a one-year period. The last wage adjustments were implemented in June this year.

Citing Republic Act No. 6727 or the Wage Rationalization Act of 1989, Nagkaisa chair Sonny Matula noted that adjustments were allowed despite the one-year ban on wage increases “under the principle of supervening event.”

Employers’ warning

As expected, the Employers Confederation of the Philippines (Ecop) on Wednesday voiced its opposition to the possibility of a new round of salary increase for minimum wage earners next year, saying it could lead to closure for some businesses and unintended troubles for nonminimum wage earners.

Ecop president Sergio Ortiz-Luis Jr. told the Inquirer that most of the businesses in the country were micro, small and medium enterprises (MSMEs), and that these small businesses would be ill-prepared to absorb the costs associated with a wage hike today.

“If you raise the minimum wage further, only two things will happen: these small businesses will either cut the number of their employees, or they will raise the prices of their products,” Ortiz-Luis said, highlighting that about 90 percent of MSMEs were micro enterprises.

The Philippine Statistics Authority (PSA) categorizes an enterprise as micro if it has less than 10 employees and small if it has 10 to 99. Medium firms are those with 100 to 199 employees, and large if they have 200 or more.

Additionally, the Ecop official said that raising the minimum wage would benefit only about 10 percent of the total number of workers in the Philippines to the detriment of the remaining 90 percent who would be affected by possible price increases that might result from such a move as businesses pass on their added cost to consumers.

Acceptable proposal

According to the PSA, 47.58 million Filipinos were employed as of September 2022, of which 42.8 million were not minimum wage earners.

Go Negosyo founder Joey Concepcion, a known advocate for MSMEs, said he was wary whether a minimum wage increase was appropriate today or otherwise.

“Many MSMEs are basically surviving at this point. If you look at the performance of even the big companies, they are also struggling,” said Concepcion, who is also a part of the government’s private sector advisory council.

He added that the working capital—or the money used in a business’ day-to-day trading operations—of many MSMEs has nearly doubled at this point, warning that these enterprises might not be able to withstand more pressure.

Concepcion said that an acceptable outcome could be to limit a mandatory minimum wage hike for micro and small enterprises, while excluding medium and large enterprises.

“Large companies have (collective bargaining agreements) anyway and the workers can negotiate directly with management. The medium enterprises, we can, perhaps, lump them together with the large (enterprises),” Concepcion said. INQ

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