Why wage boards are the better option

Amid the bickering on who’s to blame for the failure to become law of the minimum wage hike bills approved by both chambers of Congress, one thing stands out: economists are adamant that a legislated wage increases can be perilous.

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“Raising the minimum wage by P200 would have ‘dangerous repercussions,’ including hurting the country’s economy, small business owners, and driving a spike in consumer prices, according to the Marcos administration’s economic managers,” read the lead paragraph of the Manila Bulletin’s banner story last June 12.

The top headline story came in the wake of intensified calls for the enactment of a wage law shortly after the House of Representatives passed a P200 wage hike measure, 15 months after the Senate approved a P100 wage increase.

A convening of the Bicameral Conference Committee to reconcile the two versions did not materialize as the 19th Congress adjourned sine die. Until the last day of session, both Houses refused to budge and adopt the other’s version, which could have done away with the need for bicameral consensus before being forwarded to Malacanang. The two chambers then blamed each other for the impasse.

With the death of the wage measure in the 19th Congress, it is widely expected that similar bills proposing a minimum wage increase would again surface in the upcoming 20th Congress, just as what has been happening in practically every Congress all these years. Such phenomenon raises the question: Is a legislated wage hike the best way to address the need for increase in pay of our workers?

There’s no dispute that wages need to be raised occasionally to keep up with rising costs of basic needs due to inflation, and to help the families of wage earners meet basic nutritional requirements derived from food, the most basic of all needs.