Promoting joblessness

The last thing this country should want is to have politicians dip their hands into wage-setting. You can almost hear lawmakers counting the brownie points they think they would earn with voters in case they get to legislate an increase in the minimum wage.

It gets worse: several lawmakers are reportedly open to a national minimum wage, as proposed by some sectors. Anyone with a modicum of sensibility understands that the cost of living differs widely across the archipelago, so how can there be a uniform minimum wage, even within the same industry?

Everyone is suffering from galloping inflation. Economic managers should stop denying that the sizable excise tax on fuel products and energy is the culprit. The tax is not entirely to blame, but it is among the factors. Combined with surging crude oil prices in the world market and the peso depreciation, the fuel excise tax has helped make pump prices jump by over 100 percent since its implementation in January – and consumers haven’t seen the end of price hikes.

Everyone needs relief, especially the extremely poor and daily wage earners. But the need for wage adjustments must always be balanced with job preservation, with job creation as the ideal goal. Tripartite regional wage boards are meant to achieve this balancing act. The mechanisms are in place, and the less politicized the process, the better for workers and employers alike and the healthier for the economy.

The average employer is already having a hard time complying with current wage rates especially in Metro Manila. Increasing the minimum wage by about 50 percent to cope with inflation sounds good for political grandstanding. But combined with soaring costs of other production inputs and business expenditures, such an increase could force the shutdown of many enterprises. Even large enterprises might find it more cost-efficient to relocate to neighboring countries such as Vietnam and Myanmar.

The result is unemployment, and it’s uncertain that those who will lose their jobs can quickly find work overseas. When unemployment rises, none of the grandstanding politicians who want to legislate wages will take the blame.