Employers doubt they can handle shift to legislated wage coupled with oil crisis

EMPLOYERS said a legislated minimum wage will be difficult to handle on top of the fuel price shock caused by the outbreak of fighting in the Persian Gulf.

“Our problem is not salary, our problem is the high cost of living, which I think is beyond the control of the enterprises,” according to Sergio R. Ortiz-Luis, Jr., honorary chairman of the Employers Confederation of the Philippines.

Speaking on the Money Talks with Cathy Yang program on One News on Tuesday, Mr. Ortiz-Luis said the proposal to legislate a single national minimum wage disregards the advantages of the current setup involving regional wage boards, which are in a better position to determine a suitable wage for their areas.

“Even if the regional wage boards are not perfect, we support (that system),” he said, alluding to criticism that wages have languished because such boards can only accept wage hike petitions on the anniversary of the previous wage action.

He warned that a single minimum wage removes the incentive to do business in less-developed areas.

“If salaries are the same, everybody will invest only on the in urban areas,” he said.

The Trade Union Congress of the Philippines once again declared its support to pass a bill imposing a P200 national wage hike, citing the likely impact of the Iran crisis on the prices of basic goods.

A legislated wage hike would “protect the purchasing power of Filipino workers amid inflationary pressures from escalating tensions in the Middle East,” the group said earlier this month.

However, many employers have long warned that a mandated wage increase could raise operating costs and result in job losses.

Mr. Ortiz-Luis said decisions issued by the Regional Tripartite Wages and Productivity Boards balance worker interests with those of employers, adding that the boards consider employers’ capacity to absorb added costs.

Last year, the House of Representatives passed on third and final reading a measure calling for a P200 across-the-board minimum wage hike for workers in the private sector.

However, senators failed to reconcile the House measure with their version, which supported a P100 wage hike, before the 19^th Congress adjourned.

Mr. Ortiz-Luis also said that only the medium and large enterprises can provide transport allowances to ease the shock of rising oil prices.

Bigger firms have also been providing transportation services for its employees.

He said micro enterprises are the most vulnerable to external price shocks.

“Don’t expect anything from the micro (segment) because they’re just trying to survive,” he noted. “Many of them are really struggling even without this crisis.”

Despite this, Mr. Ortiz-Luis said providing temporary relief to consumers may not be enough. “We are not exactly fond of these dole outs and targeted giving,” he said.

He also favored a measure seeking to grant President Ferdinand R. Marcos, Jr. the authority to suspend or cut excise taxes on petroleum products.

Mr. Ortiz-Luis also supported proposals to reduce the value-added tax on petroleum products. — Beatriz Marie D. Cruz