DOLE shoots down P125 minimum wage hike plea

Citing inflationary impact, P770.7 billion annual cost burden on industry, and erosion of the country competitiveness vis-à-vis Asian neighbors, Labor Secretary Rosalinda Baldoz ruled out Friday support for the P125 minimum wage hike several partylist legislators had proposed.   "While the DOLE shares the view that there should be high and rising living standards for workers and their families, the DOLE cannot support the proposed across-the-board P125 daily wage increase because it will weigh down heavily on the economy through higher prices, loss of jobs, and slower overall economic growth," Baldoz said.   Pending in Congress is House Bill No. 375—An Act Providing for a P125 Daily Across the Board Increase in the Salary Rates of Employees and Workers in the Private Sector and for Other Purposes—filed by Anakpawis Partylist Rep. R. Mariano; Bayan Muna Partylist Rep. T. Casino and N. Colmenares; Gabriela Partylist Rep. L. Ilagan and E. de Jesus; Kabataan Partylist Rep. R. Palatino; and Teachers’ Partylist Rep. A. Tinio.   Baldoz said raising the minimum wage by P125 will raise daily effective labor cost per employee by P156.49 or P4,081.78 per month or P48,981.37 per year.   "Taking into consideration the 15.7 million wage and salary workers employed in private establishments nationwide as of July 2011, an across-the-board P125 wage hike will translate to an additional labor cost of about P2.5 billion per day—at P156.49 x 15.7 million wage and salary workers—or P64.2 billion per month, or P770.7 billion per year," Baldoz computed.   "The more serious impact, of course, would be the erosion of the country’s competitiveness and loss of investments," she said, saying higher labor costs will erode the country’s competitiveness against other Asian countries in attracting foreign direct investments.   She said the minimum wage in the Philippines—equivalent to about $9.05 to $9.91 is several dollars higher than wages in other East Asian countries:  

• Thailand ($5.23 - $7.26;
• China ($3.75 - $6.98);
• Vietnam ($2.23-$3.19);
• Cambodia ($2.03); and
• Indonesia ($2.67-$4.93).

  But the Philippines’ minimum wages are much lower than those of Taiwan, where it is at $20.13 and South Korea, where it is at $30.66. "The NEDA estimated that if wages were increased by P125 across-the-board in July 2011, inflation rates would have risen by 11.7 percentage points, effectively breaching the target inflation range of 3 to 5 percent," the DOLE chief also said..   NEDA also estimated worker displacement of 344,000 if the minimum wage hike were done in 2011 and that, in turn, would have raised the unemployment rate to  7-7.2 percent to 7.9-8.1 percent.   "This year, it would have displaced 353,000 workers that could bring unemployment from 6.8-7.1 percent to 7.7-8 percent," Baldoz added. — ELR, GMA News