P200 wage hike: Expect inflation, joblessness & dole-outs to rise

We can’t help but agree that any non-productivity related cost (such as pay hike) is an additional burden, non-value adding. That we are non-productive has factual basis. For one, globally, in 2023, we only ranked 116th (Wikipedia) in labor productivity and nothing much has changed. In fact, that is one of the reasons that our foreign direct investments (FDIs) are coming in trickles.

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Notably, non-productivity related wage increases will have repercussions. Why? It will only be added to the cost. As businesses have to stay afloat, they pass on the pay hike to customers by way of price increases. Thus, inflation picks up.

We must also realize that non-productivity-related wage increases had always brought about negative consequences especially to the new entrants and the unemployed in the labor market. Logically, because when non-productivity related increases are imposed, the unskilled and inexperienced workers or new graduates will suffer the major blow. With the same amount of pay, companies will definitely go for skilled and experienced ones.