Only 16% of labor force to benefit from wage hike: PCCI

CAGAYAN DE ORO CITY—Only 16% of the country’s total labor force will benefit from any legislated wage increases, Sergio Ortiz-Luis Jr., chairman of the Philippine Chamber of Commerce and Industry (PCCI), claimed on Thursday.

Ortiz-Luis said that the 16% belongs to the “formal” sector while the rest, or 84%, are in the “informal” sector.

“The formal sector of our labor force is the only one that is affected by any legislated increase in salary. The rest, or 84%, is always left behind,” he said.

Ortiz-Luis said only those who are in the formal labor sector are covered by the Labor Code and other labor laws. The greater majority who compose the informal sector are not covered by the laws because they are mostly small self-employed entrepreneurs and workers in the so-called“underground economy.”

The informal sector is comprised of casual, contingent, contractual, seasonal, temporary and non-regular employees who are really “the unsung heroes” who have contributed to the growth of business and industry progress and yet are taken for granted.

Recent statistics from 2008 of the Department of Labor and Employment (2008) showed that the informal labor sector in the country comprises 20 million workers while the formal sector is just 5 million.

But the Employers’ Confederation of the Philippines (ECOP) said the formal sector is composed of 5.067 million out of a total labor force of 34.5 million.

Ortiz-Luis said that while the P75 across-the-board increase in salary is a “populist idea,” it will really benefit only a few workers and not those who are in the informal sector.

“You’re not doing the working class a favor by increasing the wage,” he said, warning that if this happens in light of the power crisis that is spawning a host of other problems, particularly in the business sector, many businesses will be forced to retrench workers or shut down operations to cope with the rising cost of doing business.

“It is not really a question of how can we cope, but how productive we will be,” said Jaime Ralph Paguio, president of the Cagayan de Oro Chamber of Commerce and Industry Foundation Inc. (Oro Chamber).

Paguio said while most businesses in Cagayan de Oro which are members of Oro Chamber have not yet thought of laying off workers, some “may be forced” to move toward that direction if the power crisis persists and no mitigating measures are instituted in the short term.

He stressed, however, that they are also thinking of using “flexi-time” to cope with the power crisis. “It really is a judgment call for businesses,” he said.

Ruben Vegafria, president of the Promote CDO Foundation and chairman of the Regional Small and Medium Enterprise Development Council in Northern Mindanao, said the business sector is “now suffering” because of the power curtailment imposed by the National Grid Corp. of the Philippines because of limited power supply produced by the National Power Corp.

Vegafria said the petition for a P75 across-the-board wage increase filed by the Trade Union Congress of the Philippines (TUCP) will further the suffering of the sector and eventually result in the suffering of the labor force. “The TUCP petition is bordering on being heartless. The business sector is suffering already,” he said.

He and other business leaders fear that many politicians running for various elective positions will milk the petition to boost their chances of victory at the polls.

“We hope the politicians will not ride on the TUCP request,” he said.  –Bong D. Fabe, Business Mirror