ECOP warns of rising non-compliance

Of mandated wage hikes

Employers yesterday warned of increased non-compliance to new wage hike order with employees of small and medium enterprises (SMEs) are likely to suffer again from the brunt of any wage adjustment.

Donald Dee, president of the Employers Confederation of the Philippines (ECOP), said more than 50 percent of employers have not yet complied with the previous wage adjustments. ECOP considers mandated wage hike band-aid solution to the overall problem of an inefficient economy.

Based on Wage Order No. NCR-21 issued by the Regional Tripartite Wages and Productivity Board (RTWPB), salaries of private sector workers in Metro Manila will receive additional R21 wage hike or from R491 daily wage rate to R512.

“We have no choice, it is the law, but we see higher non-compliance with the new R21 daily wage hike order,” Dee said noting that the SMEs will have a hard time complying with the new order.

Out of the 4 million working Filipinos, Dee estimated that only 700,000 belong to the organized labor and are therefore benefitting from the wage increase. The unorganized labor, which account for the bulk of workers like the taxi drivers, are the ones who will not benefit from the mandated wage hike.

ECOP will hold another meeting with various labor groups next week to discuss the right solution to the wage issue.

Dee noted that every time a wage hike is ordered by the Regional Tripartite Wage and Productivity Board, workers would complain of it as insufficient while employers would counter with claims that the wage hike will impact on their competitiveness.

Indeed, he said, any new wage hike will impact on a company’s competitiveness because of productivity issue.

The real problem, Dee said, is not the wage issue but the inefficiency of the economy that is causing reduction in purchasing power of a worker’s income because inefficiency means higher cost of transportation and cost of goods, which is the result of the country’s poor infrastructure.

“We should address infrastructure first,” he said. While ECOP favors the RTWPB as the wage setting body, Dee stressed that raising salary is a band-aid solution that can easily be wiped out by higher cost of commodities and transportation.

“This is what we should address,” he said adding that ECOP will continue to meet with labor groups ALU-TUCP (Alliance of Labor Union-Trade Union Congress of the Philippines) next week.

With this situation, he said, it is difficult to encourage investors to expand in the country.