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Economic cluster opposes proposals for national minimum wage

Members of the government’s economic cluster on Thursday reiterated their opposition to proposals seeking a national minimum wage, saying this would only worsen inequality among the regions.

According to the Department of Finance (DOF) Legislative Liaison Specialist Jeanne Guinto, the agency supports maintaining the current system of regional wages, as needs vary among areas.

“On aligning the minimum wage of those in the province with that in the city, we really think that it will not be an effective measure,” Guinto said before the House Committee on Labor and Employment.

“The cost of living in the province is different from that of the city, so they may have different needs in terms of allocating their income for their basic necessities and other expenses,” she added.

The committee on Thursday deliberated on House Resolution 1676, which looks into the possibility of establishing national minimum wages, as proposed by labor groups amid the COVID-19 pandemic.

Guinto cited the inflationary impact of the measure, with the country now battling higher costs due to the successive hikes in the pump prices of both global and domestic petroleum products.

“We post an objection to the proposed measures as these may cause high inflation on top of the ongoing fuel crisis that will impact both in business side and in households,” she explained.

Domestic prices have been hiked for 11 straight weeks so far, with gasoline up by P7.10 per liter and diesel by P13.15 per liter on Tuesday alone. The Department of Energy (DOE) has maintained that the ongoing conflict between Russia and Ukraine has hit global prices, which in turn impacted domestic prices.The National Economic and Development Authority (NEDA) mirrored the DOF’s sentiment, also citing the “significant differences” in the economic conditions across the regions.

“We share the objective of raising living standards for workers and their families, but we are unable to support proposals to have a uniform minimum wage across regions,” Director Reynaldo Cancio said in the same hearing.

“This will erode the ability of other regions to attract industries and enterprises, and worsen the inequality across regions. There are significant differences in the economic conditions across the regions,” he added.

According to Cancio, the price gap of basic goods vary across regions, and could be as high as 40% for rice, 35% for chicken and pork, 50% for electricity, and 70% for water.

Labor groups have been pressing the government to increase the daily minimum wage in the National Capital Region (NCR) to P750, with Labor Secretary Silvestre Bello III himself noting that the prevailing wages may no longer be enough.

Bello has since ordered the Regional Tripartite Wages and Productivity Boards to expedite their review of the minimum wage, with the recommendations expected before the end of April.

The House Committee on Energy on Thursday said it will reconvene to discuss the matter after 30 days when more information is readily available. —NB, GMA News