Local businessmen push wage policy based on productivity

MANILA, Philippines – Local businessmen are asking the government to replace the minimum wage system with a two-tiered wage policy that is based on productivity.

“There is a need to change the mindset of the stakeholders to work together towards one goal which is economic emancipation not only for the workers but also for the employers,” Employers Confederation of the Philippines (ECOP) president Edgardo Lacson said in an interview.

According to Lacson, they are pushing for a total cancellation of the minimum wage. He said the Department of Labor and Employment (DOLE) recently proposed a two-tiered policy for wages that is based on productivity.

Lacson said that employees that are performing well will be given salary increases while those that are not will not receive any incentive. He admitted that it may take some time before this policy can be implemented because the government must study the appropriate base pay per province. The base wage, he said will be based on the poverty threshold.

Lacson said President Aquino has already expressed his support for the government initiated two-tiered system, “the two tiered system is a work in progress. The policy is set but we have to work on many other things.”

Lacson explained that the high minimum wage in the Philippines not only puts the country at a disadvantage when it comes to competitiveness, it also has an adverse effect on fresh graduates looking for work.

Initially, he explained that the intent of the minimum wage is to set a base pay that can be given to fresh graduates looking for jobs. Lacson said that since the minimum wage is already high, employers are opting to hire experienced people so that they will not have to pay for training that is sometimes needed by fresh graduates.

At the same time, Lacson said they would like to decriminalize labor code violations. He said the Philippines is the only country in the world where employers could go to jail for up to two years. Likewise, he said they are strongly opposing moves in Congress to double the jail time to two years. He said although no employer has ever been sent to jail for labor code violations, there are 30,000 cases pending against employers.

“They are going to disincentivise investments by making labor code very hard,” Lacson said. He also cited some anti-employer proposals in Congress like a four day work week. “They have a lot of anti-employer bills that may just chase investors away.” –Ma. Elisa P. Osorio (The Philippine Star)