Tuesday, May 20, 2008 Biz groups say P150 wage hike might trigger inflation, cause massive layoffs
As expected, labor unions and employers groups presented conflicting positions on the wage hike petition during yesterday’s public hearing conducted by the Regional Tripartite Wages and Productivity Board (RTWPB) 7.
Labor’s push for a P150 hike in wages was opposed by employers, who warned of dire consequences of another round of wage increases.
RTWPB 7 is set to rule on the wage hike petition after deliberating on May 22 the arguments of both workers and employers on the issue.
In a show of unity, eleven labor groups filed the joint petition for a P150 across-the-board adjustment in daily wages, noting that the cost of living in Central Visayas has gone beyond the purchasing capacity of workers.
They said that for the first quarter of 2007 alone, inflation rate in the region was pegged at 2.06 percent and this has eroded the purchasing power of the peso at an average of P0.69.
Measured against inflation, the minimum wage rate of P250 is only worth around P167.01.
The petitioners said that despite government efforts to stave off inflation, prices of basic commodities continue to go up.
Wendellon Buenviaje, counsel of the Trade Union Congress of the Philippines (TUCP), argued that from 1989 to March 2008, the minimum of P89 was rose to P250 per day or an equivalent of 281 percent.
But the increase in the Consumer Price Index in Central Visayas for the same period rose to 454 percent or a disparity of 173 percent.
“If the 1989 purchasing power of the wage earner is to be restored, the minimum wage should be increased by 454 percent, which would be equivalent to the minimum wage of P400 per day or an increase of P150,” he said.
Business groups, in their own position papers, said however that the amount being asked for is shocking and could trigger unprecedented spiraling cost-push inflation, job losses and unemployment.
The Cebu Chamber of Commerce and Industry (CCCI), through businessman Edgar Godinez, said their group concurs with the stand of the Philippine Chamber of Commerce and Industry and the Employers’ Confederation of the Philippines that the wage increase will affect cost of operation.
“Already, most of the Cebu businesses are struggling against a tide of steadily rising costs considering that they belong to the small and micro category. To reverse this trend and stimulate growth and jobs, we must work to reduce the costs of doing business,” CCCI’s position paper said.
“Increasing the minimum wage at a time when we can least afford it just adds to the problem,” it added.
CCCI noted that high wages discourage the use of labor-intensive operations or technology in industry, which will find it more cost efficient and productive in the long run to resort to automation, capital-intensive technology, and the deployment of small but highly skilled workers.
Jeoffrey R. Escala, president of the Mactan Export Processing Zone Human Resource Association (MEPZHRA) and Paul Flutty, president of Mactan Export Processing Zone Chamber of Exporters and Manufacturers (Mepzcem) submitted a joint resolution stating that a wage increase of P150 per day even if staggered, is not feasible for majority of the Mactan Economic Zone locators.
“If forced, this will trigger massive company closures, job losses, unemployment, economic disorder and the said companies will lose whatever competitive advantage we have over other countries in the Asian region,” they said.
The signatories of the joint wage hike petition were the Alliance of Progressive Labor (APL), Association Labor Unions (ALU), TUCP, Nagkaka-isang Lakas ng Mangga-gawa-Katipunan, Shemberg Employees Independent Union, Employees Association of Robinsons Supermarket, Nagka-hiusang Mamumuo sa LBF Hardware, Kan-irag Employees Labor Organization, Bank of the Philippine Islands Employees Independent Union, Grand Majestic Convention Center Employees Union and Public Interest Advocacy and Litigation Office. (EOB)
