By ERWIN ‘AMBO’ DELILAN
SENATE Bill No. 2534, which proposes a P100 across-the-board wage hike, is looming as a catastrophe. This perspective comes from Frank Carbon, the Chief Executive Officer of the Metro Bacolod Chamber of Commerce and Industry (MBCCI).
Meanwhile, Sen. Jinggoy Estrada, the bill’s main author, insists that 4.2 million minimum wage earners will significantly benefit from this legislation, which the Senate approved on its third and final reading on Monday, Feb. 19.
Senate President Migz Zubiri, a co-author, sees it as a substantial aid for workers in the Visayas and Mindanao, who currently earn between P360 to P400 daily.
“What does P360 amount to nowadays?” Zubiri questions.
Both Estrada and Zubiri present valid points, but let’s take a look at Carbon’s insights on the issue.
Work Rotation
Initially, Carbon highlights the potential for employers to resort to work rotation should they find the combined burden of a P100 daily wage hike and the nearly 30% increase in premiums for employees’ benefits — such as the Social Security System (SSS), PhilHealth, Pag-IBIG, maternity, paternity, and even sick leave — unsustainable.
Employers might reduce workdays from six or seven days a week to just three or four. While layoffs may be avoided, the impact of work rotation on affected employees could be significant.
Moreover, Carbon warns of an economic slowdown. He argues that wage increases are inherently inflationary, predicting that about 90% of the workforce, or roughly 45 million workers, will face higher costs for food, energy, and travel expenses.
Thus, he believes the proposed wage hike will ultimately not benefit workers, maintaining a “zero sum gain.”
This concept suggests that any advantage gained by one side is offset by a loss to the other, particularly as the wage increase could lead to higher prices for food and fuel, exacerbating inflation during an already volatile period.
The non-food sector, in particular, may find itself in a precarious position.
‘Fatal Consequence’
Carbon provides a stark analysis: of the country’s approximately 50 million workers, 45 million are self-employed, with only five million in the formal sector. Consequently, the wage hike would benefit just 10% of the workforce, leaving the remaining 90% — especially the self-employed — vulnerable to inflationary pressures.
This concern has led 15 large business groups, including the MBCCI, to oppose the wage hike, not out of self-interest but due to the potential “fatal consequences” for the economy and the populace.
‘Romantic but Catastrophic’
The notion of a wage increase is appealing, as it promises an additional P3,000 monthly for workers. However, if Carbon’s analysis holds, the adverse effects on the cost of living, including basic commodities becoming unaffordable, could be disastrous.
What’s the use of this wage hike when ang ultimo nga talong mangin P100 na ang bilog?
Intention is Good But…
The proposal’s intentions are undoubtedly positive, aiming to alleviate financial strains on workers. Yet, the potential ripple effects — ranging from exacerbating an already sluggish economy to further impoverishing the needy — are concerning.
Prices for ordinary goods have already been rising; for instance, the cost of a simple food item has increased fivefold, with the potential to double again shortly.
Kon sang una ang presyo sang ordinaryo nga kihad sang ginamos tag-P1 lang, karun tag-P5 na. What if tomorrow tag-P10 na?
Businesses, regardless of size, will likely comply with the law if enacted but will also seek to recoup their costs by raising their prices — a standard practice. This has led some to wistfully prefer a return to meager earnings if it meant more affordable living costs.
“Mas maayo pa nga magbalik kita sa tag-P10 lang nga sweldo kada-adlaw kay ang singko sintomos pwede pa maka-bakal tinapay.”
Carbon’s warnings provide a crucial perspective, offering a mathematical rationale against the wage hike. It’s imperative for the government to consider these implications carefully to avert the forecasted catastrophe./PN
