Saturday, May 24, 2008 Trader fears firms’ shutdown
BUSINESSMAN Carlos Co yesterday said the decision of the Regional Tripartite Wages and Productivity Board (RTW-PB) 7 to increase the minimum wage by P17 was a big blow to the business sector.
Co, past president of the Cebu Chamber of Commerce and Industry (CCCI), said it will also cause a lot of micro enterprises to trim down their business operations.
He said that business expansion plans will be put on hold and some might even be forced to close down.
“For foreign investments, existing and potential investors will think twice before investing or relocating here especially for those that are labor-intensive,” Co said.
He also said that this will mean less employment opportunities for jobseekers.
Department of Labor and Employment (Dole) 7 Director Elias Cayanong, who also sits as the RTWPB 7 chairman, said that the P17 increase in the minimum wage is final but does not apply to those who are receiving higher compensation.
During the public hearing on the wage petitions, Jeoffrey Escala of the Mactan Export Processing Zone Human Resource Association (MEPZ-HRA) said that locators at the Mactan Economic Zone are worried with the impact of a wage increase.
Escala said that if the finances of a manufacturing firm will be stretched due to high wages, it will be forced to reduce its workforce by firing workers.
But Marianito Ventura, a labor representative to the RTWPB 7, said that some of the businessmen in Cebu and Bohol that he had talked with told him that they are willing to pay a wage increase of as much as P20.
Ventura said that Escala’s statement is “incredible” because National Economic and Development Authority (Neda) statistics showed that the employment rate in Central Visayas increased by 10 percent in 2007 compared to 2006.
As a matter of fact, Ventura said that Neda 7 Director Marlene Rodriguez proposed an increase of P25.
Rodriguez admitted having suggested a P25 increase but later voted for the P17 increase after hearing the side of the employers’ representatives.
Senate President Manuel Villar, who was in Cebu yesterday, said that it’s hard to come up with an ideal rate of increase for wages.
He said that while workers need a wage increase, the government must also look into the plight of the businessmen because if they cannot afford to pay the new rate, it can badly affect their businesses.
Cebu City Mayor Tomas Osmeña also said that the P17 increase will mean lesser people will be employed.
He added that it would also be difficult to attract more investors to the City, saying that investors would instead opt to put up businesses in areas with lower wages.
“It makes us less competitive in bringing in investors,” he added.
Osmeña said that he has met a lot of people willing to work for P1,000 or P1,500 a month just to buy rice.
“These people end up as BIN volunteers, barangay tanods, household helpers, assistant cooks in carenderias. They don’t get anywhere near the minimum wage,” he said.
Osmeña also stressed that it was also important that people should deserve to be paid higher.
He said that there are a lot of people who do not deserve an increase in their salaries, citing as examples City Hall workers.
But some workers commented that the wage hike is too low and could not answer the eroding purchasing power of the peso.
One said that the P17 is not enough to buy a kilo of NFA rice.
Owen Migraso, a freelance graphic artist, said that living wage in Central Visayas is P640 but the minimum wage is only 250.
“It’s an insult that the government has only granted P17. It surely would not compensate the worker’s daily expenses,” he said.
According to Al, a financial consultant, the wage is beneficial for the working class.
Owners of micro enterprises understand the necessity of a wage increase to help the workers cope with the rising cost of commodities. But it could hurt them too.
Steven, an owner of a car accessories company, said that his business has drastically slowed down with the recent crisis.
The hike in the daily wages of more than 10 workers is going to add to his operational expenses. (EOB/EPB/STC Mass Comm intern Strawberry Yap)
