Zubiri pushes for P150/day nationwide pay hike
By Gerard Naval and Raymond Africa
WITH the new minimum wage rate in the National Capital Region (NCR) now in effect, the Federation of Free Workers (FFW) yesterday warned private establishments that the issue of wage distortion may cause unrest in workplaces if left unresolved.
In a statement, FFW President Sonny Matula said they are concerned over the potential unrest among workers once the established hierarchy of wage scales is disrupted.
“The P40 wage hike in the National Capital Region will surely bring wage distortion. This situation can lead to unfairness and potential unrest among the workforce as it disrupts the established hierarchy of wage scales,” said Matula.
The order raising the minimum wage in the National Capital Region by P40 issued last June 26 took effect yesterday and will benefit an estimated 1.1 million minimum wage earners.
Senate President Juan Miguel Zubiri, meanwhile, said “several businessmen” are amenable to a legislative wage increase of P150 a day nationwide.
Zubiri issued the statement amid concerns aired by various business groups that they cannot cope with the proposed P150 legislated daily wage increase.
“On the flip side, I spoke to several businessmen who are agreeable with the move to increase wages as they have seen a marked increase in Filipino workers wanting to leave the country and work abroad,” Zubiri said in a message to the media.
“They are experiencing brain drain on skilled workers and having a hard time hiring even new graduates who are applying for passports to seek greener pastures abroad,” he added.
He said the businessmen he had talked to are aware of the latest survey results which convinced them a wage increase is necessary.
Zubiri was referring to a survey that showed that 51 percent of the population “feel they are poor and experienced deprivation and hunger” and a survey that showed the second highest problem of Filipinos is low wages, next to controlling inflation.
He cited a Pulse Asia survey conducted from June 19 to 23 showing that 97 percent of Filipinos are in favor of an increase in daily wage “by P150 in the private sector nationwide.”
That survey, shared by Zubiri to the media, showed that 97 percent of the respondents who favor a wage increase are from Metro Manila, 95 percent from Balance Luzon, 99 percent from the Visayas region, and 100 percent from Mindanao.
Ninety-four percent of the respondents are from social classes A, B, and C; 97 from social class D, and 99 percent from social class E.
Another Pulse Asia survey conducted on June 19 to 23 showed that 44 percent of Filipinos want an increase in workers’ pay.
Zubiri said he is confident that businessmen can afford the proposed wage increase “with the growing economy” after the COVID-19 pandemic.
“I believe that businesses can absorb the slight additional cost to their production but will get in return a more productive and inspired workforce,” he added.
Zubiri had earlier said the P40 wage hike among minimum wage earners in Metro Manila is not enough, the reason why he is pushing for an additional P100 daily wage hike.
He said he will still push for a P150 legislated daily wage increase in all regions. The last time a legislated wage hike took effect was in 1989, with P89 a day pay hike granted to workers.
Zubiri, in an interview with dzBB, said the administration’s economic team is opposed to a P150 legislated daily wage increase but added it is about time since the Philippines has been left behind by its Southeast Asian neighbors in terms of daily wage rates.
“They previously said the Philippines has the second highest wage in Southeast Asia. It’s no longer true,” he added.
Zubiri said that based on his research, Malaysia now has a P880 daily minimum wage and Indonesia P810.
He said Vietnam, which has nearly the same minimum wage, is now planning an increase.
“Let us not allow ourselves to be left behind. A big number of our countrymen are suffering,” he added.
He said the idea is to have a uniform P150 minimum wage hike and lawmakers are eyeing several proposals on how to accomplish this.
“We can make it graduated. For example, in NCR we will add P100, isn’t it? In Luzon, the Visayas, and Mindanao we will make it P150 for all. Or we can make it P110 in Metro Manila and the rest of the regions at P150,” he said in a mix of Filipino and English.
He added the Senate will push for the passage of the proposed legislated wage hike even if it is not included in the 20 priority measures the President wants to be passed before the end of the year.
BIG IMPACT
Matula said possible labor disputes and fairness concerns could impact overall workplace productivity.
Wage distortion is a situation wherein standard wage rate differences among employee groups within an establishment are severely diminished or eliminated due to enforced wage increases.
Matula cited as an example four employees with different service lengths ranging from one to seven years, and are receiving daily wages of P570, P590, P610, and P620, respectively.
With the new wage order, the worker earning P570 will receive the full P40 wage hike, raising his daily earnings to P610, while the other workers earning P590, P610, and P620, respectively, have no wage increases.
“Upon closer examination, the existing wage differentials among these workers are eliminated, resulting in wage distortion,” said Matula.
According to FFW, the most effective method to solve wage distortion issues is by adopting an across-the-board wage increase policy.
Matula said this the P40 minimum wage increase in Metro Manila will be applied to all employees.
“FFW recommends implementing an across-the-board wage increase among lowly employees to preserve the wage differentials and, thereby, prevent potential disputes,” he said.
“Management should consider wage adjustments that preserve equity and fairness across all employee groups,” Matula added.