Hike in minimum wage

Business leaders in Cebu expressed opposition to House Bill 7787 filed by the Makabayan bloc in the House of Representatives, which seeks a nationwide minimum wage of P750 a day. The bill was filed following the rise in prices of commodities attributed to the implementation of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Wage hikes mandated by Congress are not the usual recourse of workers reeling from inflation. Republic Act 6727, also known as the Wage Rationalization Act that was enacted into law in 1989, established a mechanism to determine the minimum wage of workers at any given period. The task has since then been primarily given to the Regional Tripartite Wages and Productivity Board (RTWPB) under the Department of Labor and Employment (DOLE).

The establishment of the RTWPBs seems logical at first blush, considering the variations in the economic situation per region. From there stems the difficulty in pegging a uniform minimum wage nationwide. In theory, the RTWPBs are in the best position to tackle workers’ demands for adjustments in minimum wage. The understanding is that the fixing of minimum wage would be well-studied.

Each wage board is headed by the DOLE regional director with his or her counterparts in the National Economic and Development Authority (NEDA) and the Department of Trade and Industry as vice chairpersons. Workers and employers have two representatives each in the board, appointed by the president for a term of five years each. Each RTWPB is assisted by a secretariat.

In practice, however, the flaw in the composition of the RTWPBs stood out. More often than not, the voice of the workers’ representatives in the RTWPB is drowned by those of the employers’ representatives and the NEDA and DTI regional directors. Workers’ disenchantment with RTWP decisions eventually set in, prompting labor groups to seek congressional intervention instead.

This setup is observable in RTWPB 7, which has been mandating increases in minimum wages that workers here see as mere crumbs when compared with the increases pegged by other RTWPBs. That is why the Makabayan bloc bill includes a provision abolishing the regional wage boards.

In a way, more significant than the fixing of the minimum wage at P750 is the abolition of the wage boards—a provision in the bill that business leaders here overlooked.