The clamor for wage increase

THE current clamor to increase the minimum wage is prompted by a number of reasons, the most important of which is the rise in the price of crude oil.

Under the law, the minimum wage can only be adjusted once within a period of 12 months.

For instance, in Metro Manila, the last wage increase was granted on May 26, 2011. In other words, the one-year ban still holds and no wage petition may be legally entertained until May 27, 2012.

Recent increases in the price of crude oil however, have also prompted an increase in transport fares, the cost of electricity and food prices.

Supervening events

Ordinarily an extraordinary increase in the cost of fuel oil triggers a clamor to adjust the minimum wage. These extraordinary movement in consumer prices are called supervening events that would prompt the filing of wage petitions.

The wage boards by themselves can also initiate consultation or public hearings even without any wage petition. The regional wage boards, acting motu propio, have granted increases in the minimum wage more than that initiated by the labor unions themselves.

The job of increasing the minimum wage has been delegated to the regional wage boards more than two decades ago.

Republic Act 6715 or the Wage Rationalization Act of 1989 inaugurated the era of fixing minimum wages at the regional level. Until the passage of RA 6715, the task of fixing minimum wages all over the country, or at a national level, was a function of Congress. It was former Senator Ernesto “Boy Herrera”, now president of the Trade Union Congress of the Philippines who shepherded the passage of a new minimum wage law in Congress.

Wage petitions

Minimum wage levels in five key areas in Luzon, Visayas and Mindanao.

So far, three petitions have now been filed in three different wage boards all over the country.

The first one was filed March 16 by the TUCP for workers in Metro Manila. Normally, once a petition is filed in the National Capital Region, the rest of the regional wage boards follow suit.

Next to file a wage petition was the TUCP chapter in Calabarzon for an increase of P86 for workers in Region IV-A. Another petition was filed the next day, March 28, also by the TUCP, asking for an adjustment of P80 for workers in the Cordillera Autonomous Region.

Already, Labor Secretary Rosalinda Baldoz has ordered the regional wage boards to conduct consultations and hold public hearings on the wage petitions. Malacañang has said that the matter of increasing wages falls squarely with the 17 Regional Tripartite Wages and Productivity Boards all over the country.

If we go by the practice of regional wage fixing in the last 23 years, we can safely conclude that the current agitation for wage increases will be adequately handled by the regional wage boards which are tripartite in composition— workers, employers and the government.

Wage boards unresponsive

Of course, a number of workers and trade unions do not find the regional wage boards responsive. Records show that wage increases granted by the wage boards fall far below real wages.

The current minimum wage in Metro Manila for instance of P426 per day, is equivalent to P326.00 only if compared to its value in 2006. In other words, wages have stagnated and have not increased in real terms in the past six years.

The range within which wages have been increased in the whole country is anywhere from P3.00 to P22.00 per day. The highest amount that was granted by a regional wage board was P26.50 in the National Capital Region in 1998.

Some labor groups like the militant Kilusang Mayo Uno have called for the abolition of the wage boards all over the country. KMU is spearheading a movement to increase by P125 the current minimum wage across-the-board, across-the-country, by way of legislation.

Two-tiered approach

There is one aspect of fixing minimum wages that has never been adequately addressed. This is the issue of aligning wage adjustments with increases in productivity. Too often employers complain that increasing wages without taking into account productivity gains tends to be inflationary and wreck havoc to the economy.

The proposal to institute a two-tiered approach in minimum wage fixing seeks cure this productivity deficit. Secretary Rosalinda Baldoz is expected to submit this proposal to Pres. Aquino this coming Labor Day. –Manila Standard Today, David Diwa