Labor group rejects ‘installment’ wage hike

Laborers are seen at work in a factory at the Mactan Export Processing Zone (MEPZ) in Lapu-Lapu City in this file photo. (Photo from the Facebook account of the MEPZ Workers Alliance)

MANILA, Philippines —  Implementing the wage hike among private workers on an installment basis would fail to meet their urgent needs, the Federation of Free Workers (FFW) said on Monday.

FFW said that a one-time full implementation of the wage hike is necessary to allow workers to finally cope with the high prices of goods in local markets.

“If it’s a staggered increase, it seems like we’re not serious about resolving the urgent needs of the workers and their families,” FFW said in a statement.

“By opting for installment payments, we risk trivializing the dire needs of our workers and undermining the intended purpose of wage recovery, thereby perpetuating the financial hardships faced by families below the poverty threshold,” FFW Vice President Jun Mendoza Ramirez was quoted as saying in the statement.

In late February, Manila Rep. Joel Chua proposed a P100 daily minimum wage increase on a “staggered” basis over the course of three years to “balance the interests of workers and businesses.”

Chua warned that if a one-time big-time pay hike were to happen, businesses may either push up the cost of  goods to make up for losses due to the wage increase, lay off their workers, or firms still recovering from the impact of COVID-19 may be forced to close.

Ramirez stressed that if a wage hike pushes through, it should be applied uniformly across all sectors to prevent labor disputes which may be caused by a wage distortion.

“It is imperative for Congress to legislate this wage increase across the board to forestall any disputes over wage distortion. If necessary, a clear and simple legal formula must be established within the four cornersof the law to address any wage distortion issues, thus preventing further disputes,” he said.

Previously, Employers Confederation of the Philippines President Sergio Ortiz-Luis Jr. said that the proposed pay hike would result in the closure of many micro, small, and medium enterprises.

Other members of the House of Representatives have also warned against the possible negative effects of a wage increase of such magnitude to small businesses.

But labor groups, including FFW, repeatedly pointed out that a wage hike will help increase consumers’ purchasing power which may eventually help spur the country’s economy.