IN the mid-1990s, the US Congress increased the minimum wage and researchers found that this did not affect business at all.
Why should we worry about the wage increase that Malacañang has been daily urging Congress to legislate?
On television yesterday, former Budget Secretary Benjamin Diokno, now back to his job as UP economics professor, said that the US wage increase took place during an economic boom.
Our wage increase comes while business is in distress.
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Wage increases in America are spaced many years apart. Here minimum wage increases are decreed yearly.
This year, when business conditions have hit bottom, the administration wants two wage increases, the first having been imposed in June and the second to be declared before Christmas, six months apart
It must be noted that power rates in America are reasonable and stable. Ours are the most unstable, thanks to the scandalous contracts given independent power producers. The rates, increased every few months, went up substantially just a few short weeks ago. With the EVAT, another substantial increase has been announced.
More factories will move to China and Vietnam.
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Because the US economy is strong and the wage system is stable, even the smallest entrepreneurs can afford to pay the minimum wage increase.
Here even big companies have to strain to meet the wage increases. Diokno warns that small and medium enterprises will be the hardest hit, first by the EVAT and then by the drop in consumption to be brought on by the unpopular tax.
He warns of bankruptcies and lay-offs. So much for the administration’s frequent promises to support small and medium enterprises which employs more than half of the nation’s workers.
Why legislate a wage which will push so many businesses over the brink and with them their workers?
