THE P100 wage hike bill raised concerns from experts, consumers, and business owners as the legislated wage may do more "harm than good.”
Under the Senate Bill No. 2534, or the P100 Daily Minimum Wage Increase Act of 2023, minimum wage workers in the private sectors are required to receive increase to “alleviate the living conditions of ordinary Filipino,” which is approved in the third and final reading of the Senate on Feb. 19.
Although freelance barber Edison agreed that the bill is generally good for the working class who has monthly salary, it will not be beneficial for barbers like him who are paid through commissions.
“Mas okay din yung tumaas yung sweldo kasi kailangan lalo sa panahon ngayon, maliit lang sweldo natin sa Pilipinas. Syempre, kailangan talaga number one talagang mangyari yan [na] itaas ang sweldo ng mga kada isang empleyado,” Edison, who is freelancing in Supremo Barbers, said.
(It is better to increase wages since it is necessary today where the salary is low in the Philippines. It is essential to raise the salaries of each employee.)
Despite the possible higher pay, business owners like Edwin Vergara worries that the price of their offerings will also rise as small food stalls like Mang Tootz in Sampaloc, Manila will be the most affected ones. While Vergara supports the proposal for a national wage hike, he warns that it also has consequences when not appropriately studied by lawmakers.
"So, it's like a domino effect. If the laborer's [wage] increases, food [prices], and market [prices], raw materials will also increase," he said.
Students from various schools in Manila also recognized that it may result in higher cost of products and services for consumers, affecting both demand and production of companies.
National University student Noah thought that it may “complicate” their financial decisions as they need to check if the demand is justifiable to the quality of products as budget constraints also determine their willingness to spend more.
"The proposed wage hike could increase small businesses' goods and services costs, potentially reducing demand and improving employee satisfaction, possibly boosting service quality and productivity,” he said.
“Increased wages might also elevate employees' spending, broadly raising demand for goods and services. The overall impact will vary based on factors like business sector, pricing strategy, and product demand elasticity," he added.
‘Breakeven’
Cai Ordinario, a macroeconomic reporter for Business Mirror, stated the proposed wage hike could take a toll on the country's current inflation.
“Higher costs of companies will prompt them to raise prices of their goods and/or services. Job losses are possible as well as an increase in informal jobs," Ordinario told Manila Pulse.
Similarly, a consultancy economist, who requested anonymity, cited that a wage hike and inflation cancel out the hike’s benefits as it might be a “fuel” to continuous inflation.
She agreed that businesses will have to adapt to higher prices for the goods to “breakeven”, where small businesses cannot sustain the financial burden in changes, resulting in cutting expenses or closing.
“We all want a wage increase para sa betterment ng mga kababayan natin na nasa minimum wage ang sahod, pero kailangan natin isipin 'yong other side of the coin, which is ang mga businesses, especially 'yong mga micro, small and medium enterprises at small businesses, na tiyak na tatamaan nito,” she told Manila Pulse.
(We all want a wage increase for the betterment of our countrymen who are minimum wage earners, but we need to think about the “other side of the coin,” which are the businesses, especially the micro, small, and medium enterprises and small businesses that are affected.)
The measure mandates the Department of Labor and Employment to inspect the payroll and other financial records to monitor its proper execution.
Penalties for violating the bill are a fine of around P50,000 to P100,000 or imprisonment for two to four years.
As of this writing, the bill is still awaiting the approval from Congress and the president. – Amir Khalil Sioson/Manila Pulse
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