THE Mandaue Chamber of Commerce and Industry (MCCI) has come out against the proposed wage hike, warning that the proposed increase could jeopardize the recovery of local businesses still struggling from the Covid-19 pandemic’s impact.
The chamber pointed out the discussions within the Regional Tripartite Wages and Productivity Board to support calls for a P150 wage hike in Congress during the public hearing in Cebu City on Tuesday, Aug. 20.
Representing nearly 500 companies, 80 percent of which are micro, small, and medium enterprises (MSMEs)., MCCI stressed that the timing of the wage adjustment is particularly problematic given the fragile state of the economy in Mandaue City, a key industrial hub in Southern Philippines, Mark Anthony Ynoc, president of MCCI told reporters on Thursday, Aug. 22, 2024.
Ynoc said MSMEs account for more than 90 percent of the enterprises of the Philippines and provide more than 60 percent of jobs in the country.
The unemployment rate in Mandaue City stands at 4.1 percent, a slight improvement from the 4.8 percent recorded in August of the previous year.
MCCI expressed concerns that a wage hike could potentially reverse these gains, impacting both the employability of workers and the overall economic progress of Mandaue City and the country.
The chamber’s position paper dated Aug.20, highlighted the need to also factor in the cost of living, production costs, prices of goods and services, subsistence standards, and the overall economic conditions.
MCCI warned that using inflation alone as a basis for wage increases is insufficient and could lead to unintended consequences, including job losses and a potential decline in investments.
Ynoc emphasized that the city’s businesses could be significantly impacted by wage adjustments, with the potential to either make or break their success.
He added concerns that higher wages could drive investors away to more business-friendly locations, reducing the chances of new job creation in the area.
Moreover, Ynoc noted that large companies, often perceived as more capable of absorbing wage increases, could also face difficulties; these businesses might respond to higher labor costs by cutting down on their workforce, with employee retention often being deprioritized in cost-cutting measures.
Despite these concerns, MCCI stated its support for a two-tiered wage system, which would establish a minimum wage close to the regional poverty threshold, with additional compensation linked to productivity.
They believe this approach could provide fair compensation without undermining business sustainability.
MCCI also called on the government to improve the overall business climate in the country, particularly by making it easier to do business.
Ynoc said that a more conducive environment would attract both local and foreign investors, leading to more job opportunities and long-term economic growth. / CAV