Latest minimum wage hike seen as win-win solution
The latest adjustment on the daily minimum wage of private workers in the Cordillera issued by the Regional Tripartite Wages and Productivity Board is a win-win solution for the employers and labor sector during this period of recovery from the impacts of the Covid-19 pandemic.
Department of Labor and Employment-Cordillera Director Nathaniel Lacambra, also the RTWPB-CAR chairperson, explained the latest order fixing the minimum wage at P380 effective June 14 and a uniform P400 for all provinces and cities in the region by Jan. 1, 2023 is a result of a painstaking process to strike economic balance and a simplified computation of wages both for minimum wage earners and domestic workers regionwide.
He said economic factors such as Consumer Price Index, Regional Gross Domestic Product, poverty threshold, capacity of employers to pay, and the needs of employees and their families have been considered in the decision-making process after a series of consultations with concerned government agencies and stakeholders.
“We have to take note there were no wage adjustments in the past two years. So we strived to strike a balance using the economic fundamentals and we consulted all stakeholders concerned,” Lacambra told the Courier.
Based on their latest estimates, the region’s poverty threshold from the first quarter up to the end of the year is from P380 to P390.
The Philippine Statistical Authority defines poverty threshold as the minimum income required to meet the basic food and non-food needs such as clothing, fuel, light and water, housing, rental of occupied dwelling units, transportation and communication, health and education expenses, non-durable furnishing, household operations, and personal care and effects.
Lacambra acknowledged there may be some businesses that will meet difficulties in complying with the latest wage increase, but he said it is the reason they made the increase in two tranches – P30 to P40 in June 14 and P20 after six months – to give the sectors concerned, especially to those who are still in the process of recovering from the pandemic, to cope and adjust.
“Hindi natin ito binigla. Sa halip na minsanang implementation, we made it in two tranches instead because we know ngayon pa lang nakakabangon ang karamihan lalo na ang mga small businesses,” Lacambra said.
Nonetheless, he said the wage order carries a provision allowing for an employer to apply for an exemption from the implementation of the wage increase as provided for under the Wage Rationalization Act or Republic Act 6727.
RA 6727 states retail/service establishments regularly employing not more than 10 workers may be exempted upon application with and as determined by the appropriate wage board in accordance with the rules and regulations of the National Wages and Productivity Commission.
Wages of household workers have also been increased by P500 to P1,500 bringing their monthly minimum wage at P4,500 in the entire region.
Lacambra said it is the first time all provinces and cities in the region will be a having the same minimum wage rates, which is part of the agency’s effort to simplify the rates.
“Napakaraming wage rates that it becomes confusing. So the wisdom of the latest wage order is simplification and having a single rate in all provinces of the Cordillera. And since we all have the same expenses and cost of living, we might as well have the same (daily minimum wage),” Lacambra said.
All factors considered, he said they believe the amount is the best possible rate to reach a balance, and added the amount of increase no longer required making an adjustment in the cost of living allowance or COLA.
Lacambra assured they will continue to study the region’s wage structure and certainly, the agency will unilaterally make adjustments when necessary or if they see the need to adjust based on prevailing economic condition to ensure an ideal wage structure and productive employer-employee ties. – Hanna C. Lacsamana