Employers reject wage hike

BUSINESSES remain opposed to a wage hike this year, citing a fragile economic recovery, preferring non-wage benefits for workers instead.

“Industry and businesses, in general, are in a very weak position at the moment to absorb a wage hike,” Employers Confederation of the Philippines President Edgardo G. Lacson said during the public hearing held yesterday by the Regional Tripartite Wages and Productivity Board of the National Capital Region (NCR).

“While some companies have recovered, there are a lot of others, including micro, small and medium enterprises, that are still having difficulty due to the crisis. This is still a fragile economy,” he noted.

A wage hike, he said, could derail recovery, especially as the world economy faces new threats like a potential spillover from the fiscal problem raging in the eurozone. “We’ll be back to square one,” Mr. Lacson warned.

Yesterday’s meeting followed a March 1 hearing the Metro Manila wage board held with labor groups on the petition filed by the Trade Union Congress of the Philippines for a P75-across-the-board salary increase.

In the same event, the First National Petroleum Retailers Association, Inc. asked that its 3,000 members be exempted from mandatory wage hikes, citing these small businesses’ low margins.

“We have, on the average, 20 to 25 employees per retail station and we hire elementary and high school graduates; so, basically we’re part of the informal sector. And only some of the retailers can afford a minimum wage hike, especially those stations directly operated by the three petroleum companies,” said Abraham T. Rivera, president of the Petron Dealers Association.

The group added that rising electricity cost already burdens small industry players.

Employers dismissed labor groups’ argument that a wage hike would restore workers’ purchasing power that has been eroded by rising prices. They reiterated that any additional labor cost would be passed on to consumers.

“This is going to be an unending cycle because any increase in cost would always be passed on to consumers,” Federation of Philippine Industries Director Luna S. Go said. “We should think of other ways to resolve this, other than wage hike.”

During the hearing, Ernie O. Cecilia, American Chamber of Commerce of the Philippines, Inc. (AmCham) committee chairman for industrial relations, said the group could make concessions involving “non-wage solutions.”

The proposed “non-wage solutions” include having the government mobilize the manufacturing sector to offer cheap goods to low-income workers, as well as provide training for employees to help them manage their finances, Mr. Cecilia said.

“The amount of salary should be based on the employee’s value of job created and not on their needs; because if it’s based on how much they needs, their salaries would always be insufficient,” Mr. Cecilia explained.

AmCham also expressed willingness to support non-wage benefits like a sack of rice or a bag of groceries each month.

While additional fringe benefits could be considered, “make sure that companies won’t be hurt since fringe benefits have corresponding taxes,” Mr. Cecilia said.

The NCR wage board has scheduled a hearing with the Regional Tripartite Industrial Peace Council on April 26. The board will need 45 days to decide after a final hearing on Apr. 29. — MACBC