Ducky Paredes

Malaya (12.28.06)

“In private business, if one is losing money, one has to close down the business since, unlike governments, private businesses have a finite source of capital.”

The Legislated Wage Hike

by Ducky Paredes

The Lower House has passed a bill legislating a Wage Increase, Under the bill, a wage increase of P125 will be given in installments over a three-year period: P45 in the 2007, P40 in 2008 and another P40 in 2009.
The government worker is getting a P1,500 wage increase; thus, it only seems right that the private worker also gets an increase.
Of course, the government does not have to worry about productivity. There is no bottom line by which governments can judge themselves as to success or failure. A government that lives on deficit spending is seen as just as well- or badly-run as one that is working on a balanced budget.
In private business, if one is losing money, one has to close down the business since, unlike governments, private businesses have a finite source of capital. In fact, most of the businesses in the Philippines who employ most of the workers are small businesses with very limited capital. They cannot afford to pay the legislated wage increase.
The larger corporations can probably afford it. As a matter of fact, most of these large companies hardly have anyone of their employees still on the minimum wage. Most of their workers are making much more than the minimum.
It is the small businesses with 50 employees or less that have most of their people still on the minimum wage. These are the ones who will be most affected by the legislated wage increase.
A small business that has a large volume of business will most likely be a distributor for a large company. One that I know well has only 30 employees. In truth, today, with everyone on the minimum wage and a small productivity bonus, the business hardly keeps its head above water.
One notices, however, that most of the workers have been able to provide themselves with motorcycles, TV sets and other luxuries even with their meager salaries and small bonuses.
When the legislated wage increase kicks in, this will add P1,350 in the daily expense of the enterprise. Consider that it is paying for electricity, water, rental, fuel, taxes and other expenses which have all increased significantly and which will increase even more with the legislated wage increase.
Because it is just a distributor, there is no way that this small enterprise can increase the price of the product. The company that manufactures the product dictates this. Thus, where will he get the increased cost of doing business, which translates, to P33,550 a month! One doubts if this small enterprise makes that much in profits!
The large corporations will hardly be affected by this legislated increase. Most of their workers are already making more than the minimum. It is the small enterprises, that cannot afford the additional cost, which will be the most affected.
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Remember that idea that the government proposed about levying a tax on each text message and each phone call that we make on our cellular phones?
In Hawaii, where I used to live, there is a tax on cell phone usage. This is 66 cents (P32.74) monthly tax which would pay for technology that would pinpoint the location of people calling the emergency number – 911. The big beef of Hawaii cell phone users is that the state has raised more than $14 million in the past 2 1/2 years and only about $200,000 of that money has been spent. In fact, no one seems to know how much the technology will cost.
(Of the 66 cents, the cell phone companies keep 1.32 cents for collecting the money for the state.) There are 860,000 cell phones in Hawaii.
The nice thing about Hawaii is that taxpayers can complain about stuff like this. In fact, if it turns out that the technology will eventually cost less than the amount collected, whatever surplus there will be will be returned to the taxpayers.
As it now stands, the state is thinking of putting up towers so that cell sites can cover the whole state including uninhabited valleys where the cell phone companies will not invest in a tower because these would not be commercially viable.
Another thing that cell phone companies do not have to worry about in Hawaii are NPAs looking for revolutionary taxes who will blow up one’s tower if not payment is received by their revolutionary tax deadline.
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The Federation of Philippine Amateur Senior Golfers, Inc. (FPASGI) will hold it year-end tournament and the 6th Leg of the 2006 San Mig Coffee Sugar-free Senior Golf Series in Wack-Wack Golf and Country Club on December 29, 2006. We tee-off promptly at 7:00 a.m. with a shotgun start on every one of the 18 holes.
Our Principal Sponsors for the tournament organized by the Capitol Senior Golfers, Inc. are: San Miguel Corporation, Fortune Tobacco Corporation, Smart Communications, Government Service Insurance System (GSIS), Philippine Long Distance Telephone Company (PLDT) and Unilever Philippines.
Our Hole Sponsors are Philippine Air Lines, Mayor Boyet Gonzales of Mandaluyong City, Mayor Marides Fernando of Marikina, Speaker Jose de Venecia, Dencio’s Restaurant at Capitol Hills Golf Club, Risk Profile Insurance, Megaforce Batteries and ARL Maritime Services, Inc.
At 1:00 p.m., FPASGI members who were not accommodated may join us for lunch and for the awarding where all FPASGI members will receive give-aways and minor raffle prizes. There will be at least 40 major raffle prizes including two 29 inch flat TVs and three smaller ones. A refrigerator. Microwave, DVD players, gift certificates and a magic sing are among the other major prizes.
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Readers who missed a column can access www.duckyparedes.com,/blogs. This is updated daily. Your reactions are welcome at duckyparedes@yahoo.com
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hvp (12.27.06)

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