THE proposed P100 to P200 nationwide minimum wage increase by Kamanggagawa Party-list Rep. Eli San Fernando touches a soft spot.
It was in the period of the First Quarter Storm, at the dawning of the 1970s, when such a wage increase was the main demand of the Katipunan ng mga Makabayang Obrero (Kamao), a newly formed labor union at the Amado Araneta-owned Makabayan Publishing Corp. in Cubao, Quezon City.
That was the period of the incredibly massive flowering of the spirit of “serve the people” so that while I was already a member of the five-man management committee of the company, I found it noble and so heartwarming to accept the popular clamor, albeit silently, of the mass of membership for me to head the union. The acceptance necessarily triggered the instant feeling by the Makabayan management of having been betrayed. When I presented the union’s demand letter to the management, what I instantly got were my walking papers.
At a general meeting — in the surroundings of activist undertakings (a stage play here, discussion groups there, revolutionary singing by activists all around) — at the campus of the Philippine College of Commerce in Sampaloc, Manila, the Kamao members overwhelmingly resolved to go on strike.
At dawn of April 24, 1970, strike the union did.
With the frequent physical skirmishes between the 300-strong union members and the equally numbered Araneta Center security force bolstered by yet another 300 of the Quezon City Police, the Kamao strike went down the annals of the First Quarter Storm as the Araneta Commune.
Come August, the realities of truly serving the workers began unfolding. Ultimately short of needed resources, Kamao gave up the picket and entirely shifted to court battle, which after a process that took years, ended in a win at the National Labor Relations Commission (NLRC).
It turned out, however, that the NLRC decision was appealable to the Supreme Court. Although sustaining the NLRC verdict, the Supreme Court ruling no longer contained “Amado Araneta” among the respondents. And with the Makabayan Publishing Corp. having been dissolved way back in the 1970s, there remained no more entity to serve the Supreme Court final decision to.
After years of waiting, the Kamao members all ended up reaping the wind.
I cannot help recalling the Kamao experience now that with the Kamanggagawa Partylist wage increase proposal, workers can end up just reaping the wind one more time.
Hard knocks has taught me that to truly serve the class interest of the workers, you need something a lot more powerful than mere intentions.
The proposal appears straightforward: Legislate a higher wage floor to help struggling workers. But has it been thoroughly studied? Economic policymaking is rarely that simple.
In fact, policies that appear compassionate at first glance often produce consequences that are anything but compassionate once implemented.
What is the economic reality behind wage mandates?
Contrary to political rhetoric, wages do not exist independently of the broader economic system.
They are tied to productivity, market demand and business viability.
When the government forces wages upward beyond what productivity and revenues can sustain, the burden does not disappear.
It shifts.
Employers respond by raising prices, reducing hiring, cutting working hours, or in the worst cases, shutting down entirely.
These reactions are not acts of greed. They are economic survival mechanisms.
Unfortunately, they are precisely the outcomes that a nationwide wage mandate risks triggering.
Who are the vulnerable victims of arbitrarily devised wage increases?
As the Kamao members learned the hard way, it is the workers themselves. Wages are endemic elements of the capitalist system, put in there by capitalists not as an act of humanist benevolence but as a mechanism for maintaining labor sufficiently working on and on to generate programmed profits only.
This is the sole intent. Rule out any other. Once the worker has been sapped of his labor strength, he simply fades to the gutter or die.
After all, there is always the reserve army of unemployed ever ready to get his replacement from.
But remove Marxism. The San Fernando proposal isn’t cut for that but for an evident show of upholding proletarian concerns in strictly capitalistic charades.
They don’t fit.
In discussions about wage legislation, one critical fact is often overlooked: The Philippine economy is overwhelmingly composed of small businesses.
Micro, small and medium enterprises account for more than 99 percent of all business establishments in the country.
These enterprises operate under financial conditions vastly different from large corporations. Their profit margins are thin, their operating costs volatile and their access to capital limited.
For a small business employing just 10 minimum wageworkers, a P200 daily wage increase could translate into tens of thousands of pesos in additional monthly payroll obligations once mandatory benefits are included.
For many micro, small and medium enterprises, that is not a manageable adjustment. It is a financial shock.
Economic studies suggest that a uniform nationwide wage hike could place over 100,000 jobs at risk, and possibly as many as 300,000.
That number is not theoretical.
It represents workers who may suddenly find themselves without employment because the businesses that hired them can no longer afford to do so.
When formal jobs vanish, displaced workers rarely move into stable alternatives.
Instead, many drift into the informal sector, where earnings are uncertain and labor protections nonexistent.
Ironically, a policy designed to uplift workers could end up stripping them of the security that formal employment provides.
The impact of wage mandates does not stop at employment.
Labor costs are embedded in the production of nearly every good and service.
When those costs increase significantly, businesses pass the adjustment forward to consumers.
The result is inflation.
Economists estimate that a P200 nationwide wage increase could raise inflation by as much as 2 percentage points.
For households already struggling with the rising cost of food, transport and utilities, that increase could quickly erase whatever wage gains the legislation intended to deliver.
The most troubling aspect of the current proposal of San Fernando is not its intention but the lack of economic depth it appears to reflect.
The Philippines already has a wage-setting mechanism designed to account for regional economic realities.
Through the regional tripartite wages and productivity boards, wage adjustments are evaluated based on local labor markets, business capacity and cost-of-living conditions.
Replacing that system with a blanket nationwide mandate suggests a troubling disregard for the complexity of the country’s economic landscape.
It invites an uncomfortable question: Was this proposal crafted after careful economic analysis — or merely designed to produce political applause?
Workers deserve serious solutions.
No responsible policymaker disputes that Filipino workers deserve better wages.
They do.
But raising wages sustainably requires strengthening productivity, encouraging investment and expanding industries capable of generating higher-value employment.
These reforms are difficult. They require time, discipline and careful policy design.
The danger of proposals like the nationwide wage bill is that they offer a shortcut where none exists.
And shortcuts in economic policy rarely end well for the people they claim to help.
