Government backs legislated pay hike

CLARK FIELD, Pampanga — The government is willing to support a legislated wage increase, but can small- and medium-scale businesses afford to pay higher salaries?

Labor Secretary Patricia Sto. Tomas said yesterday that while the government will fully back any legislated wage increase and big business can afford to raise wages by as much as P200 a day, small- and medium-scale enterprises (SMEs) may not be able to support any more wage hikes. She said this while a P125-a-day wage hike proposal makes the rounds of Congress.

In an interview with The STAR, Sto. Tomas said the employers’ sector seems inclined to grant wage increases, but could not say how much employers, the government and labor groups would eventually agree upon.

"The employers’ sector is okay. It (wage hike proposal) is being talked about," she said. "Initially, they will say they can’t afford it."

She said that agreement on wage hikes is usually reached at the regional wage boards, but added that members of Congress "know the pulse of the country better."

Should Congress pass a legislated wage hike, "we will implement it for as long as they pass the law," Sto. Tomas said. "What I’ve been saying is that they are also the ones who passed the law creating regional wage boards in 1989 because they saw the need for it. Now, perhaps, they think (the wage boards have) become outmoded."

Sto. Tomas warned that "there are some companies which can afford to give as much as a P200 wage hike, but there are some which cannot. If you impose (a wage hike) on those who can’t afford (to increase salaries), they will shut down."

While the proposal for a legislated wage increase is still pending in Congress, the regional wage boards are considering implementing wage hikes according to prevailing situations in the regions, Sto. Tomas said.

"Different areas will have different rates. We will have to look at inflation rates in the places (where wages will be hiked), as well as the capability of the business sector (to handle wage hikes)," she said.

"If we grant a big wage increase and local businesses cannot afford it, the wage hike cannot be implemented," she said. "That’s the reason why we have regional wage boards, so as to determine the capabilities" of local employers to pay higher wages," she added.

Sto. Tomas said that in Metro Manila, the average take-home pay of workers is P300 daily. In other parts of the country, the take-home pay is as low as P147, she added.

"The reality is (there is a need) to have more than one wage-earner in the family," she said. "According to our statistics, there is always more than one wage-earner in most families."

Meanwhile, the regional office of the Department of Labor and Employment (DOLE) in Central Luzon has clammed up on the issue of wage hikes amid the clamor of labor leaders there for a legislated P125 across-the-board wage hike.

Staff from the office of DOLE regional officer-in-charge Ernesto Bihis have been turning down requests for interviews, while employees of the regional tripartite wage board headed by Sylvia Piano have been referring reporters back to Bihis’ office.

The Central Luzon wage board integrated the P15 cost-of-living allowance of workers into their basic salaries in August last year amid demands from local labor leaders for a P70 wage hike.

The last wage increase in Central Luzon in 2002 established varying wage levels. The highest minimum wage was set at P228 for non-agricultural workers of firms with assets of over P30 million. The daily wage of workers in similar firms in Central Luzon was fixed at P224. The lowest-paid workers were those employed in cottage industries whose minimum daily wage was set at P78.50.

Central Luzon has about 3.2 million employed workers while some 500,000 people remain unemployed.