A LEGISLATED wage hike is not the best solution to address economic equality in the country and lawmakers should instead work on developing comprehensive initiatives to address the issue, business groups said.
In a joint statement, the Philippine Chamber of Commerce and Industry (PCCI) and other business organizations claimed that a proposal to raise wages by P100 per day would favor just 5 million private sector workers and put 47 million others at a disadvantage.
"Legislated wages, while hurting especially micro, small and medium enterprises, will worsen the plight of the informal sector and its overwhelming 47-million strong presence in the workforce and contribution to the economy. We take the cudgels for them who form a preponderant part of the working population," the groups said.
The informal sector includes agricultural workers with no employers, fisherfolk, unpaid family workers, home-based workers, ambulant vendors and street hawkers, jeepney/tricycle and pedicab drivers, temporary construction workers, small-scale miners and quarry workers, they noted.
Policymakers should instead move to create a more favorable business environment, which should include investing more in education, skills development and infrastructure, they added.
"It also means passing legislation to once and for all solve low productivity, poor governance, excessive regulations, worsening poverty and serious income inequality which characterize a country with a large informal sector," the business groups said.
Implementing a wage increase without thoroughly considering its economic impacts would cause more harm than good, they continued.
"The sudden imposition of a significant national wage hike would place an unprecedented burden on businesses, particularly on the micro and small-sized enterprises consisting of at least 95 percent of enterprises, many of which are still reeling from the aftermath of the Covid-19 pandemic."
Aside from the PCCI, other signatories to the statement were the Philippine Exporters Confederation, Employers Confederation of the Philippines, Philippine Retailers Association, Philippine Food Exporters, Philippine Franchising Association, People Management Association of the Philippines, Philippine Constructors Association Inc., IT & Business Process Association of the Philippines, Semiconductors and Electronics Industries in the Philippines, Philippine Hotel Owners Association, American Chamber of Commerce of the Philippines Inc., European Chamber of Commerce of the Philippines, Philippine Association of Legitimate Service Contractors Inc. and the Federation of Filipino Chinese Chambers of Commerce and Industry.
Senate Bill 2534, which proposes a P100 minimum wage increase for private sector workers, was approved on second reading on Wednesday. If passed into law, the bill would mark the first nationwide legislated pay increase since 1989.
Sen. Jinggoy Estrada, who chairs the Senate labor committee, sponsored the proposed legislation, which is expected to benefit over 4.2 million minimum wage workers in private businesses across the country.
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