Higher wages await workers nationwide

MANILA, Philippines - Here’s good news for workers nationwide.

The National Wages and Productivity Commission (NWPC) yesterday said that the two-tiered wage system is now in effect, which means workers can look forward to better pay in the coming days.

NPWC executive director Ciriaco Lagunzad said Labor Secretary Rosalinda Baldoz has already directed all regional wage boards nationwide to adopt the two-tiered system in setting the minimum wage in their respective regions.

In a memorandum circular issued last June, Lagunzad said Baldoz instructed the wage boards to use poverty threshold estimates as reference in setting the minimum wage.

“This is very important because it means in areas where the minimum wages lag behind the poverty threshold, an upward adjustment shall be done to enable families to meet the basic needs,” he added.

In areas where minimum wage exceeds the poverty threshold, Lagunzad said the board shall consider moderate or less frequent adjustments in the floor wage.

He explained that the two-tiered wage system provides for the setting of a floor wage to protect the most vulnerable workers, unskilled and new entrants to the labor force, as well as ensure productivity-based increase for workers.

According to him, the government adopted the two-tiered wage system to promote productivity improvement and to ensure a decent standard of living for the workers and their families.

“The previous minimum wage setting crowds out collective bargaining and discourages workers from exerting effort to improve their performance,” Lagunzad noted.

But with the two-tiered system mandating productivity or performance-based pay scheme, Lagunzad said workers, including those receiving above the floor wage, can expect adjustments in their salaries if they are performing well.

Productivity-based pay hike, however, would be implemented on a voluntary basis.

Lagunzad said the previous wage system only provides protection to the unorganized and unskilled workers but could eventually lead to displacement of workers.

With the two-tiered wage system, Lagunzad said “unintended results” of wage hikes can be reduced and minimum wage coverage can be improved.

The International Labor Organization earlier reported a rising number of workers in the Philippines and other countries in Asia who are getting low wages.