Angeles business owners say wage hike call could result in mass layoffs

PAMPANGA, Philippines – Organized workers in Central Luzon called for an increase in the minimum wage to P640 daily, but business owners in Angeles City opposed it and warned of consequences.

The business owners, who have been affected by declining investments and customers seeking products elsewhere, said another wage increase would be impractical and could result in mass layoffs. 

The Regional Tripartite Wage and Productivity Board in Central Luzon (RTWPB III) had approved a P40-increase in the daily wage in the region which was implemented in two tranches in June 2022 and January 2023.

The RTWPB is composed of representatives of the Department of Labor and Employment (DOLE), Department of Trade and Industry (DTI), National Economic Development Authority (NEDA), and two representatives each from the employers’ and workers’ sectors.

Organized workers, however, said the 2022 and 2023 increases were insufficient.

Around 100 representatives from various unions and associations of labor workers gathered in a protest rally at the San Nicolas Public Market on Labor Day, May 1, calling for an additional P180 on the current minimum wage.

But Miguel Dy, a merchandising store owner, told Rappler that he couldn’t afford another wage increase. 

He said it would be impractical as investments in their area continued to decline while most customers were seeking products elsewhere.

“As an employer, P640 is too much for me even at the current rate… You know, a lot of investors have withdrawn, especially during these difficult times,” Dy said.

Other business owners in Pampanga’s highly urbanized city also said a P180-wage increase is unattainable, especially given the current state of the country’s economy. 

While some businesses have remained open amid the recurring COVID-19 pandemic threat, another wage increase would require them to lay off some of their employees, they said.

“In principle, the wage increase is okay if the cost of other moving parts of the business is stable, especially energy and taxes. I never laid off an employee because of the COVID-19 pandemic. With the economy still not in a healthy state, with the high cost of living and low sales volume, I might lay off from the bottom, if that is the case,” said a business owner in the tourism industry sector who requested anonymity.

But Eduard Ellorenco, the spokesperson for the Workers’ Alliance in Region 3 (WAR-3), said the minimum wage earners could no longer bear the impact of the continuous rise in the costs of basic needs and services. 

Ellorenco said minimum wage earners need decent take-home pay to meet the needs of their families.

“The issue we’re raising is a wage increase and the dismissal of workers. Even during the formation of unions, workers are already being removed. The President should pay attention to the workers’ situation. We are talking about a decent wage for a family of five, for their daily expenses. It’s appropriate,” Ellorenco said. – Rappler.com