Senate Bill 2002 revisited

(Excerpts from the writer's "Across the Board Wage Increase Act" speech, delivered during the 4th Total Reward Congress in Sta. Cruz, Manila on 7 September 2023.)

"The bill, authored by Senate President Migz Zubiri and co-authored with Senator Loren Legarda, proposes to increase the minimum wage by P150 per day across the board nationwide.

"Foremost, this is a bill that is out of place, out of date, out of line, and out of sync with reality. In a word, it is outrageous!

"It mocks established institutions primarily created for wage setting, disrespects accepted procedures and standards for proper wage determination, and disregards the distinct and inherent economic differences and living standards per family among regions by its one-size-fits-all application. Ultimately, this bill will cause incalculable damage to our economy.

"It offers a short-term gain but a long-term pain.

"Indeed, SB 2002 is a solution……looking for a problem.

"If you will notice, every wage petition asks for an atrocious minimum wage increase to give each worker a living wage because the legislators, labor groups, and bleeding hearts blur the distinction between a living and a minimum wage.

"A living wage is the level of income needed to allow a family a decent existence and is calculated based on the "size of family and location." As of 2020, there are 26.4 million families with varying numbers of household members in the 17 regions of the country. To calculate a living wage, we would need 26.4 million mandated wage levels to cover each family in each of the 17 regions.

"On the other hand, a minimum wage is an income set by law to prevent a family from being pushed into poverty. And the poverty threshold per region is mathematically computed by NEDA based on the Consumer Price Index or CPI. It is also the entry-level for the unskilled and first entrants in the labor market.

"And they are wrong to say that we have the lowest minimum wage in the region. On the contrary, we have the highest minimum wage in ASEAN, excluding Singapore and Brunei.

"Going back to SB 2002, according to Sen. Zubiri, he filed this bill after personally asking and getting the nod of two taipans during a cocktail party, I presume.

"They probably nodded out of courtesy or to earn brownie points for mega projects that would need senate approval, or they did not hear the question because they were dui (discussing under the influence.)"

Anyway, at cocktail parties, nobody listens to anybody. They shake each other's hands with wandering eyes, looking for VIPS they may know. The customary greetings go this way: 'Hi, how are you? My wife died this afternoon. Oh, how nice.'

"Levity aside, let me start this narrative with a brief backstory.

"While we were still tentatively recovering from the deepest plunge of the economy from the Covid-19 pandemic, a wage order was issued by the wage board raising the NCR minimum wage by P40 per day. The full impact of this order will be felt in a few months, but this early, we can see signs of frantic struggles among many MSMEs to survive.

"Historically, NCR wage orders trigger similar petitions in all regions.

"Initially, Sen. Zubiri was pleased with the NCR adjustment, and he publicly announced that he might lower his wage bill down to P100 per day.

"But after a few days of political discernment, Sen. Migz retracted, and he pressed on with his p150 wage increase as reported in the PDI of 19 August.

"Sen. Zubiri said that he was guided by the results of a rider survey by Pulse Asia, which showed that an overwhelming 97 percent of respondents agreed with the P150 wage increase nationwide, 2 percent were satisfied with their present earnings, and 1 percent was undecided.

"According to the Senate press release, the survey covered respondents limited to wage earners only.

"The survey asked only one question, "Are you in favor of the P150 wage hike nationwide?"

"To be blunt, the survey was 'lutong makaw' (rigged).

"Sen. Migz and his campaign team are trekking the perilous path to economic perdition with the legislated wage increase in their quest probably for his election to higher office.

The P150 wage increase will deliver a fatal blow to our national economic programs, inflict shock on employers, and disincentivize potential investors or job generators.

"The skeletal remains of dead companies will litter the landscape, and poverty will worsen as massive layoffs will increase the number of indigents loitering in the streets.

"This is a nightmare that need not happen if the good senator and his allies fully grasp the dire impact on our economy of Bill 2002.

The P150 wage increase will deliver a fatal blow to our national economic programs, inflict shock on employers, and disincentivize potential investors or job generators.

"There are other critical economic indicators affected by SB 2002, but we will leave them for another forum.

"Our economic managers, Secretary Ben Diokno of DoF and Secretary Arsenio Balisacan of NEDA warned the legislators of the severe impact on our economy if the P150 per day increase bill is passed into law.

"The warning was carefully calibrated to avoid creating panic, but it has a subliminal message: it might cause economic collapse.

"In closing, let me quote from an article by former NEDC chairman Gerry Sicat who is an economist: 'Our labor unions and politicians who think of promoting the welfare of workers should look to these realities. When the economy suffers from unemployment and underemployment, imposing high minimum wages hurt these workers because their paths towards obtaining good jobs become more difficult.'"

(To be continued)