Lawmakers urged to stand firm on wage hike
LABOR group coalition Nagkaisa on Wednesday called on lawmakers not to “yield” to employers’ pressure and prioritize workers’ demands for a daily minimum wage increase of P150 or higher.
In a statement, the coalition reminded legislators of the provision of the 1987 Constitution on the “primacy of labor over capital” as a “guiding principle in deciding on this contentious issue.”
It said that their petition for a wage hike is not anti-businesses (including the micro, small and medium enterprises or MSMEs) because “any additional income in the pockets of workers is returned to the economy through consumption in small businesses, compared to the huge profits of businesses that only go to extravagant expenses of capital owners.”
“So, while most survive in the formal sector and self-reliance in the informal economy, a wage increase has a more positive impact on the entire economy compared to if the majority of workers remain impoverished,” it added.
On Wednesday, Nagkakaisa, along with several other labor unions, staged a protest rally outside the House of Representatives but were quickly turned away by the police.
Higher unemployment
In opposing the proposed P100 minimum daily wage hike, the Financial Executives Institute of the Philippines (Finex) said on Wednesday that the move would harm labor market conditions.
“Such a wage hike is likely to increase unemployment due to the tightening of available funds and discourage investments due to policy uncertainty in regard to wage-setting,” Finex said.
The Senate last week approved a P100 minimum wage increase for all private sector workers, rejecting claims by businesses and analysts that it would have an adverse economic impact.
If the measure becomes law, it will be the first legislated wage hike since 1989, which was also when the country shifted to setting minimum wages via regional tripartite boards.
Socioeconomic Planning Secretary Arsenio Balisacan previously warned that this could affect the recent gains in the unemployment rate, raising the number to 0.2 to 0.7 ppt and will amount to something around 100,000 to 340,00 additional unemployed people.
The unemployment rate dipped to 3.1 percent in December last year, the lowest jobless rate recorded since 2005, translating to 1.60 million Filipinos. Full-year unemployment registered at 4.3 percent, down from 5.4 percent in 2022.
“We believe that the existing regional wage boards are a more appropriate mechanism for wagesetting as they take multiple factors into account, balancing the interests of both employers and workers,” Finex said.
It said this could also lead to higher inflation, compelling companies to raise prices to offset their expenses. This, in turn, could prompt additional calls for wage hikes.
“This will also hurt SMEs, many of which are still struggling to recover from the effects of the pandemic and can barely afford to pay current wages,” Finex added.
“We urge our legislators to study other mechanisms for increasing the purchasing power of workers, such as reducing the tariffs on and increasing or removing the quotas on food imports,” it said.
Balancing labor, capital interests
House Deputy Majority Leader and Mandaluyong Rep. Neptali “Boyet” Gonzales 2nd urged lawmakers not to give workers too much hope but instead strike a balance between them and the employers.
“I don’t want to sound like a party pooper, but I would take refuge in the famous words of the late Inday Badiday, ‘Careful, Careful!’ The worst that can happen is to give too much hope to our workers that we cannot give,” he said.
The House Committee on Labor and Employment began its hearings on the proposed legislated wage hike on Wednesday.
Davao Oriental 2nd District Rep. Cheeno Miguel Almario said the matter should be studied carefully.
Meanwhile, Deputy Majority Leader and Ang Probinsyano Partylist Rep. Alfred de los Santos suggested that the proposed P100 wage hike in the Senate can be divided into two or three installments as some industries in the provinces will not be able to give it in one go.
“In that way, employers won’t get burdened, and they may prepare for any possible salary increase. We need to aid businesses as they may close down or lose employees if we enforce the wage hike in full. A calibrated wage hike will be a win-win for both workers and employers,” de los Santos said.