Now, how’s that for a title? And what am I referring to?

It’s the issue on minimum wages. It was about this time last year when the topic on wage increases was in the news. Now it’s back again. Why?

The recent spiral in oil prices has raised the cost of production and has resulted in an inflation rate that has increased the pressure to increase wages.

In Metro Manila it has been raised by P25.00/day.

What’s it going to be in Region VIII?

In Manila the inflation rate hit 10%. So if we go by proportion – wages in Region VIII should increase by P20.00/day.

But that is not the way it works. I mean, wages are not set by making it proportional to the wages in another part of the country.

Our Regional Tripartite Wages and Productivity Board (RTWPB) has to consider factors like comparing the existing wage to the so-called “purchasing power” of the peso in this region and to the employers’ ability to afford the increase given the existing state of business.

A wage increase creates a chain reaction that includes adding to production cost thus, in higher prices of commodities. It is always a cycle that will not stop.

And that’s not all. Unemployment could result if employers are unable to afford the increases since they are unable to raise prices due to, for example, strong competition from other producers.

What happens is underemployment where workers are willing to be paid wages lower than the minimum set by law especially if firms are not able to improve productivity and increases in production to recover
the cost of the wage increase.

This matter is really complicated.

By the time you read this, the RTWPB may have arrived at a decision after consulting both labor and employers’ representatives in a public hearing.

Let us hope that the RTWPB decision makes all parties truly feel they made a significant contribution to at least maintaining the quality of life while keeping our economy on the path to progress.