Mass layoffs in case of big wage hike no empty threat—employers

Employers on Friday said the possibility of workers getting laid off was not an empty threat but an expected consequence should a national minimum wage of up to P750 be imposed as a means to help cushion the impact of the Duterte administration’s tax reform program.

Jose Roland Moya, director general of the Employers Confederation of the Philippines (Ecop), said companies were also reeling from the effects of the Tax Reform for Acceleration and Inclusion (TRAIN) Act due to the increase in the cost of their raw materials.

Should the government order a significant wage increase, Moya said businesses might suffer huge losses which could either lead to layoffs or closures.

“That is not a threat. That is the truth. What is the choice of employers if their cost of production increases? We need to do a balancing act,” Moya said.

Two House bills

Two bills have been filed in the House of Representatives to help workers cope with the rising cost of goods and services.

The Makabayan bloc’s House Bill No. 7787 is proposing a national minimum wage of P750, while the Trade Union Congress of the Philippines’ House Bill No. 7805 seeks a more “realistic” across-the-board wage increase of P320.

Both bills argue the need to adjust the minimum wage due to the implementation of the TRAIN law, which imposes an excise on fuel and other goods.

Critics of the law said this had led to a spike in the cost of basic commodities.

A party-list representative on Friday described as “antiworker, unjust, erroneous” the arguments of big businessmen that raising wages was inflationary.

Bayan Muna Rep. Carlos Isagani Zarate said in a statement that raising wages nationwide was “good for the working people and for the economy as whole.”

‘Blatantly antiworker’

“It is blatantly antiworker and unjust to deny wage hikes because of the allegations that it will jack up prices,” Zarate said.

“On the contrary, prices have already been increasing for years but wages are stuck at some P500 in Metro Manila and, worse, P300-plus in many provinces even if the cost of living already skyrocketed to P1,200 for a family of six,” he added.

Zarate said it was erroneous to insist that nationwide wage hikes was inflationary.

“Increases in wages will lead to decrease in profits but won’t affect the basis of price,” he said.

Moya pointed out that the proposed wage increases in the House were “detrimental” to micro-, small- and medium-size enterprises, which accounts for 99 percent of the total number of business in the country.

“If we increase the minimum wage that much, it would jack up the cost of production and make them very uncompetitive,” he said.

Asked what wage increase rate would be acceptable to employers, Moya said that was a matter best left to the regional wage boards to decide.