Unions say wage hike won’t harm businesses

LABOR UNIONS said they reject claims made by Labor Secretary Bienvenido E. Laguesma that some businesses will face hardship if they are required to raise wages by as little as P150 per day, much lower than the full P750 wage hike being considered in Congress.

In an appearance on One News this week, Mr. Laguesma said the P750 minimum wage hike proposal, which requires at least a P150 raise across all industries, will be difficult for some small businesses, noting that 96% of enterprises are micro and small firms.

“A careful balance is needed because the needs of workers alone are not the only consideration,” he said. “It might be challenging for business owners to comply even if they want to.”

The P150 wage increase proposal is pending in both the Senate and House of Representatives, with Senator Juan Miguel  F. Zubiri and Party-list Rep. Raymond Democrito C. Mendoza, and the Makabayan bloc pushing for national implementation through legislation, bypassing the current regional wage-board system.

Speaking to BusinessWorld, Nagkaisa Labor Coalition Chairman and Federation of Free Workers (FFW) President Jose G. Matula argued that industries can afford the suggested P150 across-the-board increase, which would represent a 24.6% raise from the current highest regional wage of P610 in Metro Manila.

He said higher pay hikes have been implemented via legislation before, citing 1989’s Republic Act No. 6727 or the Wage Rationalization Act, which ordered a P25 hike, equivalent to a 39.06% raise over the P64 national minimum wage. Mr. Matula said that wage hike did not cause companies to close.

Partido Manggagawa said the negative impact of the wage hike on certain businesses will be short term, with businesses expected to thrive in the long run if workers step up their consumption on the back of higher pay.

“In the short term their profit margins might be affected, but still, they can profit,” Partido Manggagawa Chairman Renato Magtubo said in a Viber message. “It’s not a good national policy for the country to maintain depressed wages so that employers continue to profit from workers’ labor.”

In a separate interview, FFW Vice-President Julius H. Cainglet said that the wage hike is a justified response to the government’s failure to control prices of goods and services.

“Workers have long been languishing on poverty wages. For decades since the enactment of the Wage Rationalization Act, the balance has always tilted in favor of employers. This is but one time in the last 35 years that the balance will tilt in favor of workers,” he said. — Jomel R. Paguian