Happy employees are generally more productive. Keeping employees happy through proper compensation, however, depends on the capacity of the employer to pay and the viability of the business.
After two years of pandemic lockdowns, most businesses are still struggling to get back on their feet, and are operating on what is tantamount to a hand-to-mouth existence. Their problems have been compounded by higher input costs and surging prices of fuel and other basic commodities amid the Russian invasion of Ukraine.
Presidential adviser for entrepreneurship Joey Concepcion has proposed that micro enterprises be exempted from the wage hike approved last week by the regional wage boards for Metro Manila and Western Visayas. Concepcion noted that the little that micro enterprises earn daily are immediately reinvested to keep the business going, and many are in debt amid the continuing pandemic. A similar suggestion was made by the Employers Confederation of the Philippines, but
it was rejected by the wage boards.
Such exemption was approved by the wage board in the Bicol region in 2004, covering workers registered in barangay micro business enterprises. Exemptions are also allowed for retail or service establishments with no more than 10 regular workers, new or distressed enterprises, and businesses hit by calamities. The pandemic, Concepcion stressed, is akin to a calamity that has devastated businesses.
Labor groups, on the other hand, lament that the P33 daily increase approved for workers in Metro Manila is not enough to match the reduction in purchasing power in the past three years when wages remained unchanged. In Western Visayas, the increase is from P55 to 110 daily for workers in non-agriculture, industrial and commercial establishments, and P95 in the agriculture sector. Labor groups also argue that higher wages would boost purchasing power and stimulate the consumer-driven economy.
The balancing act is never easy. An estimated one million workers are expected to benefit from the wage hike. About 6,000 businesses registered as barangay micro enterprises, as certified by the Department of Trade and Industry, are automatically exempted. Distressed enterprises may be exempted, but they will have to apply for it. There are micro enterprises, however, that might find this to be too much trouble. They will have three options: defy the wage order at the risk of penalties, lay off workers, or close the business.