Calls to raise the minimum wage again are growing, and for good reason. The cost of living decently has risen much since the last adjustment in June this year. Inflation, a measure of the average increase in the prices of basic food items and services such as transportation and electricity, accelerated to its fastest pace in nearly 14 years at 7.7 percent in October, the highest since December 2008. The increase was mainly due to higher prices of food items, particularly vegetables and fish, as a result of the damage caused by a series of typhoons that recently hit the country. It is projected to remain elevated in the coming months because of persistent supply constraints in basic commodities such as sugar, meat, vegetables, and fuel.
Even Labor Secretary Bienvenido Laguesma says they are not oblivious to the impact of rising prices. “This [wage hike] is something we are studying. We are not disregarding recent events. That’s why our Regional Tripartite Wages and Productivity Boards (RTWPBs) have the directive that even though we just recently issued wage adjustments, we will still consider the current situation so we can help our workers and entrepreneurs,” he points out. However, the earliest any wage hike to be mandated by the Department of Labor and Employment (Dole) can happen is in July 2023 because of a regulation that adjustments can be made only once a year.
As expected, employers were quick to oppose any move to raise the minimum wage, arguing that this can lead to closure for some businesses and unintended troubles for non-minimum wage earners in terms of higher prices. The Employers Confederation of the Philippines (Ecop) and the country’s biggest trade organization, the Philippine Chamber of Commerce and Industry, argue that most of the businesses in the country were micro, small, and medium enterprises (MSMEs), and that these small businesses will be ill-prepared to absorb the costs associated with another wage hike.
“If you raise the minimum wage further, only two things will happen: these small businesses will either cut the number of their employees, or they will raise the prices of their products,” Ecop president Sergio Ortiz-Luis Jr. warns. The Ecop official adds that raising the minimum wage will benefit only about 10 percent of the total number of workers in the Philippines to the detriment of the remaining 90 percent who will be affected by possible price increases since businesses will simply pass on their added cost to consumers. Despite this, vice president Cecilio Pedro of the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. tells the Inquirer that they understand that minimum wage earners need a salary boost because of today’s economic challenges. “Our workers are really having difficulties coping today, so we have no choice but to give them the increase,” Pedro admits.
Since existing rules prevent the Dole from mandating another wage increase, a broad alliance of labor groups last week urged Congress to instead pass a law raising the salaries of the country’s more than four million minimum wage earners. The Nagkaisa Labor Coalition says Congress should take action because it “holds the power to legislate wage hikes and better employment programs.” It adds that this should be the government’s response, especially when “the national objective is not only about mitigating the impacts of inflation … but most importantly, on raising the standard of living of the working class.”
Labor group Partido Manggagawa has also lobbied for a P100 increase across the board in response to rising inflation. They have supporters in Congress for an immediate increase in the minimum wage. Sen. Risa Hontiveros, for instance, says that Malacañang and lawmakers should look particularly into calls for a wage increase and employment guarantees by labor groups across the country, including the P100 across-the-board wage hike proposed by Partido Manggagawa as “wage recovery” to address the diminished value of minimum wages.
Congress and the executive department should consider raising the minimum wage as soon as possible, not after the one-year prescription under existing rules. The last wage hike in June amounted to P33 for those in Metro Manila, or to P570 a day. But even this minimum pay is now equivalent to only P494 when adjusted for inflation. According to Elmer Labog, chair of the militant Kilusang Mayo Uno, it “is not even considered a living wage and now, the value of the minimum wage has been reduced because of high inflation.”
As Hontiveros notes, everyone is affected by inflation, but its worst effects are felt the most by low-wage earners, appealing to the administration and employers to “not ignore the everyday struggles of our kababayans.” While a P100 increase may be too big for MSMEs to absorb, what is clear at this point is that the minimum wage should now be increased considering how surging inflation has seriously eroded its value.