During the Labor Day celebration last May 1st, the President gave instructions to the National Wages and Productivity Council (NWPC) and the different Regional Tripartite Wages and Productivity Boards (RTWPB) all over the country to review rules on wage fixing and the existing minimum wage rates across the country. Specifically, he asked them to consider the impact of inflation on goods and services. He also pushed for “regular and predictable” schedules for wage reviews and issuances in a bid to promote the welfare of laborers.
A number of labor leaders were disappointed, however, with the President’s action as they were rallying hard and pushing for legislated wage because of alleged failure of the Regional Tripartite Wage and Productivity Boards (RTWPBs), the body in charge of determining wages.
The labor sector is clamoring for the immediate passage by the Lower House of the Senate approved bill on wage increases. A friend president of the Federation of Free Workers (FFF) found the response of the President disappointing. Other leaders called it cold and unresponsive, others as non-sustainable repetitive job fairs, Kadiwa rollouts and disbursement of highly politicized aids like Tupad of DOLE and DSWD’s AICS.
I can still vividly recall during one of the hearings for wage increases in Bacolod City where a labor leader stood up to discredit the RTWPB before the participants from labor, management and government and called for the abolition of the board and of my resignation (as regional director) or transfer for the alleged dismal failure to protect the welfare of the workers.
For so many years the labor sector was demanding that congress legislate wages.
A bill mandating a daily pay increase for minimum wage earners in the private sector, estimated to be around 4.2 million nationwide, has been approved by the Senate. Under the measure, all wage earners in the private sector in the entire country, whether agricultural or non- agricultural, are entitled to an increase of P100.O0 daily. This is in response to the rising cost of living and soaring prices, ensuring that people would have more money to meet their basic needs and on the other side would stimulate the local economies. It is said that this is a matter of economic justice and basic human dignity that would free our wage earners from poverty, to be more productive, to pay more taxes, to spend more in our economy and to be able to live a life that they deserve.
Some economists, however, posit that: a) the P100 increase in the daily minimum wage for private sectors nationwide could spell job losses especially in labor – intensive sectors where the workers are in danger of being laid-off due to higher production costs; b) The prices of goods will be raised as the additional cost will reduce the profit margins; c) a legislated wage increase for all regions makes it difficult for lower income regions to attract investments; d) it will have a negative impact on the MSMEs (as well as the entire national economy) that are just starting to rebound after the pandemic and are suffering a huge financial setback in their attempt to recover. These justifications are also supported by majority of the employers, for obvious reasons. They are actually espousing for productivity-based wage increase.
Considering the pros and cons narrated above, a reasonable wage increase can possibly be considered. However, the current move to increase the minimum daily wage seems excessive since they are across-the-board and more of a political maneuver to gain re-election votes, oblivious of its possible destructive effects on the economy and the delicate balance between income and the employer’s capacity to pay.
Yes, the survival of our workers should not be at the expense of the other economic sectors. It needs stressing that politicians are fond of using political and not economic solutions in solving problems of this nature, especially now that the election fever is on the horizon. Politics undercutting good economics appears to be the order of the day. The good reason why wage fixing is mandated by law to be done by a tripartite body at the regional levels was to come up with a very rational wage structure which is acceptable and agreed both by labor and management and complies with the development needs of the regions as administered by different government agencies.
There is a need to emphasize that the National Wages and Productivity Commission and Regional Tripartite Wages and Productivity Boards were precisely created to study and set wages at the regional level, thereby allowing wages to differ across regions to suit widely varying local economic conditions.
The Supreme Court ruled (GR 15036), “In creating the RTWPBs, Congress intended to rationalize wages, firstly, by establishing full time boards to police wages round the clock, and secondly, by giving the boards enough powers to achieve this objective xxx this Court said all too clearly that Congress meant the RTWPBs to be creative in resolving the annual question of wages without labor and management knocking on the doors of Congress at every turn. The RTWPBs are the thinking group of men and women guided by statutory standards and bound by the rules and guidelines prescribed by the NWPC. In the nature of their functions, the RTWPBs investigate and study all the pertinent facts to ascertain the conditions in their respective regions. Hence, they are logically invested with the COMPETENCE to determine the applicable minimum wage to be imposed as well as the industries and sectors to be exempt from the coverage of their wage orders.”
This decision was written by then Associate Justice Lucas Bersamin who is the incumbent Executive Secretary of BBM. This was concurred by the Chief Justice and three other members of the division (If approved by the lower house, it will more likely be vetoed by the President).
If there really were delays by the wage board in resolving petitions for wage increases, the remedy is to overhaul or recalibrate the present wage board procedures but not to add political colors to it. There is merit to the proposition that the proposed wage hike should be studied carefully as this could be inflationary and this will actually benefit only a small portion of the regular workers. Several factors should be considered such as the demand and needs of workers, the capacity of businesses to grant a wage increase and the consumer price index.
It could be difficult to get a consensus among the seven (7) members of the board
(2 labor, 2 management and 3 government) but my experience in five regions in a period of about ten years with more than 10 wage orders, decisions were issued with unanimous votes from all the RTWPB members.
In the interest of national development, there can still be unity in diversity, protecting the interest of the workers but not killing the goose that lays the golden eggs.
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Author’s email: [email protected]
