The bad news about wage hike: Business paints a gloomy picture

A wage hike can either be good or bad news.

The business sector yesterday warned that a new round of wage increase might force more companies to shut down that could result to job loss for thousands of workers in Central Visayas. 

In a public hearing held at the Cebu Grand Convention Center yesterday, officials of Mactan Export Processing Zone Chamber of Exporters and Manufacturers and the Cebu Chamber of Commerce and Industry expressed opposition to the petition of workers seeking an increase of P150 in their daily minimum wage.

Jeoffrey Escala, president of the MEPZ-Human Resource Association said that the economic locators inside MEPZ and other export processing zones in the province are already struggling because of the strong peso, high price of raw materials, high cost of power and water, government bureaucracy, and high cost of doing business.

But despite these, he said their member companies are giving lot of non-wage benefits to their thousands of workers.

He explained that implementing a wage increase, even on a staggered basis, is not feasible for many companies inside the processing zones and “if forced, will trigger massive closure, workers termination and loss of competitiveness of the companies.”

At present, he said the Philippines has among the highest paid workers in the Asian region, which lessens the competitiveness of companies here prompting many of them to transfer to neighboring countries.

But Marianito Ventura, one the of the representatives of the labor sector in the regional wage board, challenged Escala to name what companies have closed and how many workers were affected due to increase in wages.

“I’ve been hearing those reasons of the export processing zones since I became a member of the board. You always threaten of massive closure and job losses by virtue of wage increase,” Ventura said.

Escala said that it is the Philippine Economic Zone Authority that has the data, adding that some companies did not pursue with their plan to close because they were averted by the decision of the wage board.

Edgar Godinez, chairman of the committee on labor relations of the CCCI said because of the high cost of labor in Cebu, many companies have already transferred to other countries and trim down the number of their employees. He cited the case of Mitsumi, which used to have more than 20,000 employees and now employs only 11,000.

He said the workers are doing an “annual pilgrimage” to the Regional Tripartite Wages and Productivity Board to ask for wage increase, which has not improved their situation until now.

He explained that wage hike can have a chain of effects because companies will also be prompted to increase the price of their products and services to recover the labor cost.

“Has the wage increases enable you to adjust with the crisis? You are only scaring away the foreign direct investors,” Godinez said.

The Central Azucarera de Bais Inc. from Bais City, Negros Oriental also opposed the proposed wage increase as the workers are not the only ones that are affected by the high prices of oil and commodities but almost everybody, including the sugar cane companies.

But the labor sector insisted that adjustment in wage is the only immediate relief for them to be able to cope with high prices of commodities and the recent increase in fares.

Department of Labor and Employment regional director and RTWPB chairman Elias Cayanong said they would try to look for a win-win solution as they start the marathon deliberations on the matter on Thursday afternoon.

He said the board would still accept more position papers for them to review until noon of Thursday.

Cayanong said the board has a self-imposed deadline that they should come up with a decision on the petitions before the end of the month.

Yesterday’s public hearing was conducted because of the separate petitions filed by the Alliance of Progressive Labor and its allied labor groups and the Trade Union Congress of the Philippines both seeking for P150 across the board adjustment in the minimum wage in the region. Wenna A. Berondo/NLQ