Employers’ group rejects wage hike

Instead of a wage increase, how about increasing Juan de la Cruz’s spending power?

The business community rejected proposals yesterday to increase minimum daily wages, saying a wage hike will result in the closures of more commercial establishments and in massive retrenchment of workers.

The Employers Confederation of the Philippines (ECOP) said the government should provide more lasting relief by strengthening the people’s purchasing power rather than increasing workers’ daily take-home pay.

"A wage increase is merely a palliative," ECOP president Rene Soriano said. "What workers need is more lasting relief."

He was reacting to Malacañang’s announcement that workers from the private sector will soon get a salary increase.

According to Soriano, the better alternative to a wage increase is to adjust the income tax exemption level for wage earners to P120,000 from the current level of P96,000.

"Adjusting the income tax exemption level will not much (affect) government coffers inasmuch as Congress has committed to support revenue-generating measures endorsed by the Palace," Soriano said.

He added that increasing the tax exemption is preferable to a wage hike, which he said could trigger unprecedented high inflation.

According to him, the minimum wage "should be maintained at the entry safety net level for the unskilled and inexperienced worker, where more workers, especially new entrants to the labor force, have greater chances of finding employment in a labor-surplus economy."

Another wage increase, he said, will also worsen the disparity and inequity of income between regular wage earners and the country’s 20 million informal workers.

Philippine Chamber of Commerce and Industries (PCCI) president Donald Dee warned that a wage hike would trigger the closure of many small and medium enterprises (SMEs) nationwide.

"I am afraid that SMEs would not be able to comply with the wage hike while the manufacturing sector may possibly retrench workers," Dee said.

He admitted that the different wage boards already consulted employers and the boards may announce their decision to increase the current minimum wage rates on Labor Day.