30 June 2023 – NTUC Phl on minimum wages and living wages

Position on NATIONAL MINIMUM WAGES
National Trade Union Center (NTUC Phl)

Minimum wages

1. The minimum wage-fixing system needs to be re-examined and
reviewed toward national living wages.

The structure of the wage boards, dominated by government and employers,
does not make for fair wage decisions.

One of the intents of the law, particularly industry dispersion to non-traditional areas,
has not been met, even after almost 35 years
of the implementation of the wage rationalization law.

Industries, investments, and labor are still concentrated in traditional areas and regions
where markets, infrastructure, facilities, ‘high’ wages are.

Lower minimum wages in other regions
did not, and do not, foster further investments and dispersion.

NTUC Phl proposes to bring all regional minimum wages to P750 per day –
to boost consumption and further drive the economy.

This should be done in progressive (annual) wage adjustments
(say, P150 per day every year)
so as not to unduly disrupt enterprises’ operations.

That should help end exploitation
and induce radical productivity measures, too.

2. The perpetual non-coverage of barangay micro business enterprises (BMBEs)
by minimum wages should be ended.

This merely perpetuates workers’ sub-minimum wages
subsidizing their BMBE owners.

At the very least,
the ‘assets’ definition of BMBEs should be adjusted
from its now outdated P3,000,000 base set way, way back in 2002 in the BMBE law.

BMBEs are those whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant, and equipment are situated, shall not be more than Three Million Pesos (P3,000,000.00).

While the law on small enterprises
directed “review and upward adjustment by the SMED Council” or MSMED Council,
the definition of BMBEs, and therefore non-coverage by the minimum wage law,
has not been adjusted up to now.

3. Fair wages for all workers, including in BMBEs,
could contribute to reducing inequality
which is the bane of sustainable socio-economic development.

With inflation endemic,
so many with poverty-based wages and low buying power
does not lead to ever-increasing consumption
from this majority part of the population.

Many households are further going into debt
(digital lenders, credit cards – with very high interest rates)
just to support basic needs.

Wage adjustments from RTWPBs,
and those currently under discussion in Congress,
will not cover lost buying power,
much less provide respite from continuing inflation into the next year.

Living wages

The Constitution is clear.

It is clear that the country’s wage determination schemes
have not addressed the 1987’s Constitution’s mandate
that all workers “shall be entitled to security of tenure, humane conditions of work,
and a living wage.”

The country’s challenges and opportunity
are to deal with Inflation, raise productivity with gainsharing,
plus clear intentioned movement toward living wages.

NTUC Phl proposes to gradually bring all regional minimum wages
to the P1,500 per day living wage requirement.

This should be done in progressive (annual) wage adjustments
(say, P150 per day every year),
in addition to the P100 per day annual adjustments in the national minimum wage.
In stages, again, so as not to unduly disrupt enterprises’ operations.

In sum, NTUC Phl proposes the following wage adjustments:
P100 per day annual increases for five years
to bring all regional minimum wages to at least P750.
P150 per day annual increases for five years
to bring wages closer to the P1,500 per day living wage.
Or a total of P250 per day annual increases for five years.
[with smaller increases for regions with already ‘higher’ wages,
e.g., NCR, SLuzon, CLuzon)].

Yes, with this amount,
there could be some downsizing, layoffs, closures,
but we project that radical improvements in productivity efforts and gains
will be induced/forced on enterprises,
These could offset projected losses in employment.

Enterprises and their workers could continue to make plans and projections for the said five years in order to maintain operations in the face of new and necessary demands.

Micro and small enterprises already have many incentives under the law.
It is immoral to continue their non-coverage by minimum wage law or wage orders.

Enterprises that currently merely survive
on the backs of sub-minimum wage workers
need to shape up or be purged.

Collective bargaining

Statements from DOLE on collective bargaining to raise wages and benefits,
while not untrue, do not consider
the organizing and collective bargaining obstacles on trade unions.

“There are other mechanisms by which wages can be increased above the minimum wage. Of course, employers and workers are encouraged by law to undertake their own measures in increasing wages, including collective bargaining.”

“We believe that the bipartite mechanisms are still the best and most efficient way of increasing wages above the minimum wage levels,” he said.

Employers, by and large, are not supportive of unions and
have done overt and covert actions to thwart union organizing and bargaining.

Union membership, reach, and representation
have been challenged through the years.

Now, if only government and employers were more supportive …

11/2019 rev 6/2023