Pay raise not at par with cost of living

A P20 wage hike versus the rising cost of living?

Does the pay increase really mean a lot to minimum wage earners?

Cebuano economist Fernando Fajardo pointed out that minimum wage workers are being "shortchanged" in their salaries given the rising cost of living.

"I can say that the minimum earners are shortchanged because the increase in their wages could not cope up with the increase in prices," the economics professor told The FREEMAN.

"Their standard of living is going to get worst," he asserted.

The Regional Tripartite Wages and Productivity Board in Central Visayas has agreed to raise the daily pay of minimum wage earners in Central Visayas. The wage board approved a P20 increase per day for workers in Class A cities and municipalities.

Meanwhile, those in cities and municipalities classified as class B, C or D will get a P15 increase in daily wage. Those working in establishments that have less than 10 workers will get a P10 increase in daily wage.

Fajardo recalled that back in 2012, the minimum wage in Metro Cebu was at P327.

"Now after the latest wage board decision, it will be set at 386 pesos with 20 pesos added to last year's 366 pesos minimum wage rate," the economist said.

The new minimum rate, he pointed out, means an overall 18 percent increase in the minimum wage rate in Metro Cebu or Class A areas from the 2012 level.

"This is lower than the overall 21.6 percent inflation rate in the same period," Fajardo stressed.

He noted that inflation in Central Visayas from May 2012 to May this year had risen by 21.6 percent in general.

"To maintain the workers' 2012 standard of living, the minimum wage rage for Metro Cebu now should have been set at P396 per day," he said.

Cebu Business Club president Gordon Alan Joseph described the recent wage hike as "minimal" with "no real consequence to profitability" of businesses.

"I would have thought that workers would have needed more to cope with inflation. I don't know how this amount was arrived at," he told The FREEMAN.

Several business groups have strongly opposed the wage hike petitions.

The Cebu Chamber of Commerce and Industry, the Mandaue Chamber of Commerce and Industry, the Mactan Export Processing Zone Chamber of Exporters and Manufacturers, Philexport-Cebu and Cebu Furniture Industry Foundation had filed position papers opposing the increase.

To recall, the Associated Labor Unions-Trade Union Congress of the Philippines asked for a P120 increase in daily wage for all private workers in Central Visayas. Meanwhile, the Cebu Labor Coalition, NLM-Katipunan, Metaphil Workers Union and Unionbank Employees Association asked for a P155 increase.

Mandaue Chamber of Commerce and Industry vice president Steven Yu earlier said the approved wage hike is a "bitter pill" for businesses.

"Considering the twin challenges of rising costs of doing business, and intense business competition. Surely, the business community will feel the pain that this brings. Businesses will tighten their belts to survive. We just hope that the government will find ways to cushion the rising fuel costs by instituting some relief measures i.e. suspension of excise taxes, etc. We also hope that inflation can be contained so interest rates will not go further up, and GDP growth targets can be achieved to spur overall economic activities,” he said.