Not to be outdone, the Lower House has filed counterpart bills to the Senate’s proposal of a P100/day wage increase with more egregious and unbelievably shocking increments of P100, P150, P350 and P750 per day.
If I use my previous example of the same semi-conductor company with 15,000 minimum wage earners, the potential yearly financial implications for the company of the proposed increments are considerable. At P100 per day, the company would face an additional payroll expense of approximately P557.7 million annually. If the wage hike were P150 per day, this figure would rise to P836.6 million. For the more ambitious proposals of P350 and P750 per day, the annual payroll costs would soar to P1.9 billion and P4.2 billion, respectively.
It is important to note that these projected yearly payroll cost increments exclude the upward distortion adjustments for workers earning above the present minimum wage threshold. Therefore, the actual financial impact on the company will be a financial disaster.
Perhaps the Lower House needs to temper its overflowing magnanimity for one sector of society, the salaried workers, at the expense, even demise, of another and consider the broader economic repercussions of its actions. Perhaps, again, our dear members of Congress need to be reminded that it is their sworn duty to nurture the economy and protect its three major sectors: producers, workers, and consumers.
Producers are entrepreneurs who take all the risks — reputation, fortune and health — in putting up companies to provide jobs for workers and goods for consumers and to help the country move forward and upward on a long-term and sustainable basis.
The proposed wage hikes, which are impossibly beyond the capacity of businesses to pay, will exert unsustainable pressure on them. Ultimately, such wage hikes will be the final nail driven in the coffin of departed entrepreneurs.
With company closures due to the unaffordable mandated wage increase, the employees who are the intended beneficiaries of these wage bills will be out of work, and they will add to the list of families dependent on government aid like the 4Ps (Pantawid Pampamilya Pilipino Program) until the funds run out.
Equally and surely, the consumers, who include the minimum wage workers themselves, will be hit hard by the sharp rise in the prices of essentials as businesses struggle to cope with the mandated wage hikes until factories shut down completely.
These grim scenarios, I am sure, have played in the minds of the authors of the wage hike bills. Still, they are too consumed with compassion for the “downtrodden” workers whom they will unintentionally “kill with their kindness” (pun intended).
Lost in the moment’s passion is the looming threat to restore the power of Congress to intervene again at will in setting a national minimum wage level.
This power was recognized as counter-productive as it issued one-size-fits-all wage orders without regard to regional differences in costs and standards of living. Thus, RA 6727, or the Wage Rationalization Act, was promulgated, and Regional Tripartite Wage and Productivity Boards, composed of labor, employer, and government representatives in every region, were created.
RA 6727 may not be the perfect solution, but it is far superior to the old system where Congress issued irrational wage orders from their proverbial Mount Olympus, the dwelling place of the gods.
Allowing Congress to take back the power to legislate wages is a giant leap backward, a retreat, a throwback, and a barefaced act of “ungifting.”
The ongoing debates on the wage bills are highly polarizing and dripping with emotions. It is crucial for all stakeholders to pause and engage in rational discourse grounded in economic pragmatism. In the end, we all have the same desire and aspiration to promote a shared prosperity for present and future generations.