Employers buck P75 wage hike

MANILA, Philippines – The Employers Confederation of the Philippines (ECOP) yesterday said a P75 across-the-board wage increase in Metro Manila will hamper the job creation process and will only help a small fraction of the population.

ECOP issued the statement after the labor group Trade Union Congress of the Philippines (TUCP) filed with the National Capital Region (NCR) wage board a petition for a wage increase of P75 across the board for workers in Metro Manila.

“If we increase the minimum wage, the beneficiary is only 16 percent of the population – those who are fully employed,” ECOP president Sergio Ortiz Luis told The STAR in a telephone interview.

He explained that instead of hiring more workers, companies will merely be forced to increase the wages of current employees.

“This will be at the expense of the remaining 84 percent of the population,” he said. “We have issues now on unemployment. That is why this is not the best time to tinker with wages.”

Ortiz-Luis warned that forcing companies to raise wages may even lead to retrenchments. He said wages may increase if companies increase their efficiency and productivity.

He said if companies will earn the same in the future as they are earning now but will be burdened with additional costs for the payment of wages, they will look for ways to recover the cost.

“We are taking away the opportunity for others to be employed,” Ortiz-Luis said.

He said only two-income households are expected to benefit from the proposed wage hike.

On Monday, TUCP party-list Rep. Raymond Mendoza filed the petition to increase the P382 minimum wage in Metro Manila by P75 to help workers cope with increasing consumer prices in Metro Manila.

He said consumer prices rose by five percent from June 2008 to January 2010 and are expected to go up by nine percent until the end of the year.

Meanwhile, Labor Secretary Marianito Roque said the Regional Tripartite Wages and Productivity Board (RTWPB) is already reviewing the wage hike petition.

“While the policy of minimum wage fixing is to protect the purchasing power of low-income workers, it is also aimed at preserving existing jobs,” Roque said in a statement.

Roque said that they also have to consider if businesses are capable of increasing workers’ salaries.

“It is critical that the minimum wage determination strikes a balance between providing a decent standard of living for workers and ensuring the capacity of the economy to absorb the wage adjustments and viability of business, especially small and medium enterprises,” Roque said. — Ma. Elisa Osorio (The Philippine Star) with Helen Flores