The clamor for an increase in minimum wages may seem easy to solve. We all know prices have risen since the last minimum wage increase last year.

Therefore, the proper thing to do is to increase wages so that workers can cope with rising prices.

Well and good. But this is only one side of the issue. The ability of employers to grant the wage increase without going bankrupt is another side of the issue.

Still another side is the ability of the country to compete with the wages in other countries. This one is, however, tempered by the prices of commodities in their countries and many other factors like the skills and work habits of workers in specific industries. If wages are very high in the Philippines , foreign investors might go to other countries.

The matter of wage increases is obviously a complicated one.

There is that belief that wages should be left to market forces. The labor market will, so to speak, find its own equilibrium point which is the wage at which employees are willing to hire and workers are willing to be hired.

If the supply of workers is higher than the demand for workers then wages can't go up. They will, in reality, go down. Even if there are “legal” minimum wages, there will be widespread non-compliance largely because there are workers willing to be hired at the “lower than legal” wages.

This will happen when there are many who are unemployed. In the Philippines , this is about 10% of those who can be employed (are looking for work).

In this sense, therefore, laws on wages are difficult to enforce and serve more as benchmarks or standards which employers comply with if their business can afford it.

In the Philippines , the small, medium and micro industries and businesses comprise up to 95% of all businesses. The rest or 5% are large ones which employ thousands of workers and can easily afford the increases. Also, they are the ones where labor is organized and where profits are high.

Of course, the setting of minimum wages is also a political matter.

This makes deciding on minimum wages a more difficult task than it initially seems.