Killing of P200 pay hike bill also kills bid for living wage
WAGE HIKE composite image by Jerome Cristobal from Inquirer, Reuters, PDI file photos
MANILA, Philippines — To have a basic but decent standard of living, a local think tank stressed the need for a P1,217 living wage in Metro Manila, where most workers are compelled to make do with a minimum wage of P608 to P645.
Outside Metro Manila, the minimum wage is also way lower than the P872 to P2,030 living wage, which Ibon Foundation computed based on the government’s wage and inflation data.
This was the reason that the proposed P100 or P200 wage hike would have been an important step toward a living wage, not only in Metro Manila but all over the Philippines, the think tank said.
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It pointed this out as “minimum wage earners will feel immediate benefits and should be able to look forward to a living wage that actually raises their families’ standard of living to a decent level.”
But since the 19th Congress ended without the Senate and House of Representatives agreeing on how much the wage hike should be, workers will not have anything to expect, not even P50.
‘Dead’
The P100 wage hike proposal in the Senate was approved last year, Feb. 19, while the House of Representatives approved its bill, proposing a P200 wage hike, on June 5.
READ: Senate approves P100 daily wage hike bill
It would have been the first legislated wage hike since 1989, when the Wage Rationalization Act was signed and created the Regional Tripartite Wages and Productivity Boards.
GRAPHIC: Ed Lustan/INQUIRER.net
But Senate President Francis “Chiz” Escudero said House Bill No. 11376 and Senate Bill No. 2534 were not a priority of the Legislative Executive Development Advisory Council.
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Last year, President Ferdinand Marcos Jr., declining to certify the bills as urgent, asked the Regional Tripartite Wages and Productivity Boards to initiate a review of minimum wages.
The regional boards in Metro Manila, Cordillera Administrative Region and Mimaropa, among others, approved wage hikes, but only worth P35 to P40, effective last year.
‘Economic consequence’
As pointed out by the government’s economic managers, an across-the-board wage hike could have “dangerous repercussions” on the economy, saying that it could lead to higher inflation, and even jobless rates.
They stated on June 11, a few days after the House of Representatives approved its bill, that a P200 increase could raise inflation by two percentage points, while a P100 hike may lead to an increase of 0.7 percentage points.
READ: Economic team warns of ‘dangerous repercussions’ of P200 wage hike
Likewise, they estimated that a P200 wage hike would lead to a 0.6 percentage points increase in joblessness, and a 0.2 percentage points increase if the wage hike is P200.
GRAPHIC: Ed Lustan/INQUIRER.net
This, as MSMEs, or micro, small and medium enterprises, which constitute over 90 percent of all businesses, and who considerably depend on minimum wage workers, “may struggle.”
The proposed wage hike, they said, may lead, as well, to higher production costs, which could result in higher prices that may disproportionately affect low-income households.
Gov’t intervention
But for Ibon Foundation, the government can intervene if it is concerned about MSMEs that could not shell out an additional P2,000 to P4,000 for every worker a month.
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It said “contrary to government misgivings and employer complaints, a P200 wage hike is feasible and takes up just a small portion of company profits: 11.1 percent for large; 9.1 percent for medium, and 12.9 percent for small businesses.”
A wage hike of P200 would be 15 percent of the profit of micro businesses.
Ibon Foundation stressed that any large increase in minimum wage would bring “substantial relief to wage earners and their families by increasing the households’ purchasing power.”
“Wage hikes also help boost the informal economy, where workers spend their earnings, and overall they are a strong driver of economic activity and more inclusive growth,” it said.
