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Job losses with legislated wage hike- Retailers
By Nidz Godino
"Because if you mandate by law, you are forcing others who are not in position to give additional wages or adjustments in their wages," Philippine Retailers Association (PRA) president Bobby Claudio said PRA has expressed concern over proposals for legislated wage hike, noting this may result in job losses in retail industry.
In interview with reporters, Claudio warned legislated minimum wage might just bring up labor problems in industry.
"If you increase minimum wage, more people will lose their jobs because most businesses, if they have to comply with higher wages, they will simply reduce employment," he stressed.
Claudio explained mainstream retailers in the country have workforce of about half million people.
"Easily, 10 percent of that will be decimated…that's 50,000," he said. He added this would also impact families of affected workers.
"One person working in retail industry has, maybe, four or five family dependents…so we were saying before, around two to 2.5 million people are dependent on retail industry," Claudio said.
He explained job reduction numbers would be even bigger in micro, small and medium enterprises (MSMEs) in retail sector, noting that this would result in additional 300,000 to 500,000 loss of employment for the industry.
Asked for an alternative to proposed legislated wage hike, Claudio cited labor unions, which most companies have.
"If you notice in the past, we have been able to survive and adjust our wages using our wage board and collective bargaining agreement within unions. ..they are able to talk for adjustment," he said.
In June, National Wages and Productivity Commission approved P40 increase in minimum wage of private sector workers in Metro Manila.
Wage order is expected to directly benefit 1.1 million minimum-wage earners in National Capital Region.
Businesses are already adjusting from recently approved wage hike, according to Claudio.
"Anything more than that will definitely be answered by … instead of giving benefits or higher wages, to reduce people," he said.
Business groups earlier expressed concern over Senate bills propose wage increase, raising caution it may negatively impact MSMEs.
"Raising wages may appear to be easier and logical solution; however, only small percentage of total workforce , 16 percent or about eight million in formal sector out of 50 million Filipino workers in total will be able to benefit from this proposal," business groups said in letter addressed to Sen. Jinggoy Estrada, who chairs Senate committee on labor, employment and human resources.
Senate President Juan Miguel Zubiri and Senate President Pro-Tempore Loren Legarda are authors of Senate Bill 2002 seeks to legislate P150 increase in daily minimum wage while Sen. Bong Revilla filed SB 2018.
"For even as there appears to be this short-term relief to 'happy' few, we also should not ignore rising inflation has also negatively impacted businesses," business groups said, noting 98 percent of these are MSMEs suffered brunt of COVID-19 pandemic and most of which may still be closed.
Groups added MSMEs are also employers of same Filipinos whom these bills are aiming to help.
"If proposal for increased wages is approved, these employers may have to further increase prices of their products, reduce number of their workers or simply close down," they said earlier.
Signatories of letter were Philippine Chamber of Commerce and Industry president George Barcelon, Employers Confederation of the Philippines chairman Edgardo Lacson, Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis Jr., Federation of Filipino-Chinese Chambers of Commerce and Industry president Cecilio Pedro, IT and Business Process Association of the Philippines president Jack Madrid, Philippine Hotel Owners Association president Arthur Lopez, Foreign Buyers Association of the Philippines president Robert Young and United Port Users Confederation of the Phils. Inc. president Nelson Mendoza.
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