P100 minimum wage hike could cause wage distortion: DOLE
The P100 minimum wage hike bill passed by the Senate could result in wage distortion, the Department of Labor and Employment (DOLE) said Wednesday.
In a radio interview, Labor Secretary Bienvenido Laguesma said around eight million workers could indirectly benefit from the proposed salary increase.
“We have a principle that states that if there is an increase in salary there will be what we call a wage distortion…this means that there will be lesser or a severe contraction in the difference of wage levels,” Laguesma said.
Laguesma said that the proposed minimum wage hike would pressure employers to raise the salary of middle management.
“The chain reaction of the increase in salary would be felt even up to the managerial level because (employers) wouldn’t want their workers to be demoralized irrespective of their (wage) categories,” he said.
He added the government is trying to balance the interests of the workers and employers in discussing the issue of increasing the minimum wage, especially since this could affect investors.
“We in the DOLE, NWPC (National Wages and Productivity Commission), and the Regional Tripartite Wages and Productivity Boards might be seen as villains. But it's part of the government’s duty to balance these measures so that everyone could benefit and would not put one sector at a disadvantage, especially the investors who are really the ones creating jobs,” Laguesma said.
Laguesma said that the wage hike could also indirectly cause inflation which the government could manage by increasing production. Jaspearl Tan/DMS
