• Insights from looking behind the employment statistics

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    Mike Wootton

    Mike Wootton

    Singapore is reputed to be a nation of the unhappiest people in the world, as opposed to the Philippines, which is a nation of apparently very happy people. No doubt Singaporeans are unhappy because the place is so full of rules and regulations which are vigorously enforced and which intrude on people’s privacy and personal lives; the forced tidiness, crossing the street, the suggestion of state involvement in the selection of marriage partners. Selling chewing gum and failing to flush toilets are criminal offenses as indeed are jaywalking and even carrying durian. Smoking in restricted areas carries a fine of SGD1,000 (P35,000). It retains caning for more serious offenses and also the death penalty; in fact Singapore has one of the highest execution rates per capita in the world.

    But despite all this, Singapore has a GDP per capita of $37,000, is an advanced economy and is highly efficient in business, consistently ranking No. 1 in the World Bank’s “Ease of Doing Business” surveys, and has a long-term unemployment rate of 0.6 percent. Western companies venturing to the Far East will first think of setting up in Singapore or Hong Kong (which is slightly less rule-bound but No. 2 on the Ease of Doing Business rankings) rather than anywhere else—these places work efficiently. The slightly more adventurous may set up in Malaysia (No. 6) or Thailand (No. 18) ,both of which are fairly efficient but not in quite the same league as Singapore and Hong Kong. For comparison, the Philippines has progressed from being No. 113 in 2006 to No. 108 in 2014—nine places below Vietnam.

    So if it were possible to take a magic wand to the Philippines, to have a very powerful national efficiency czar for example, how things could be changed for the better! From a totally unpredictable and “More Fun in the Philippines” place into a nation which attracts business, rather than repelling it, and in which jobs are designed to do productive things rather than employing what appears to be about half the employed labor force in so many “non-jobs.”

    It is the “non- jobs” and the raft of apparently needless activities that cover up and disguise the fact that the pompous sounding “economic fundamentals” really are very shaky. Employment in the Philippines is at a very low level to start with—55 percent of the workforce engaged in full-time employment (48 percent if you discount the OFWs), with the other 45 percent (or 52 percent) being either part-time employed, under-employed or simply unemployed.

    There is much that is done in the Philippines’ way of doing things that don’t really need to be done, and there is much that is not done which really should be done. So much time, resources and potentially productive effort is spent doing things which have no direct benefit on the economy and which more often than not negatively affect economic progress. Even accepting that the Philippines does not appear to value or indeed even want foreign investment (other than on its own unacceptable terms) surely it would be better for everybody to instill greater efficiencies in the way in which the nation operates. Or are things really just fine the way they are? Or perhaps if the efficiency issue were to be transformed by the magic wand, there would then be so many people hanging around with nothing to do and no income that the place would just collapse?

    So I’m suggesting that the reality of productive employment is heavily masked by the inefficient use of the substantial labor force of the Philippines because of the 48 percent in full-time employment, much of that work is really non-productive or at best, just marginally productive. Abenson, for example, does not need 14 people loafing and chatting around the payment station with two customers in the shop on a Saturday afternoon and it does not need to take 15 minutes to complete the payment transaction for an item costing P1,500; tickets do not have to be checked entering an airport building; there need not be two scanners in provincial airports within ten paces of each other, both manned by six or seven security personnel; it should not take about 10 minutes for a single customer’s interaction with a bank teller; and it does not need legions of security guards to tell people where they cannot stop their cars and where they cannot smoke, sit down, or that they cannot enter an office building without having to give a full account of their business and write their details in great ledgers, and on and on.

    But these are only micro examples. There are much greater inefficiencies in government departments—should it really take over four years and six visits to the site with teams of up to 10 people to do tree counts (of the same trees) in order to obtain a permit to cut some of them for an infrastructure project in Palawan? And trade demarcation is still alive and flourishing in the Philippines, having been excised from most of the rest of the developed world (except Australia!) and despite the emasculation of the Philippine labor unions.

    So to introduce flexibility, to employ to reflect more economically productive use of labor, to overhaul accounting and cash management procedures, to accept that using armies of security guards does not really do much to reduce the risk of criminal activity, to get away from the necessity to evidence the most simple things (like your identity) and to just stop doing the same thing over and over again. Overall, to take a very critical look at the way in which jobs are designed and labor needs defined and to utilize IT in an effective “joined up” way would release a big inefficiently utilized labor force.

    Question is, what to do with this force! The unemployment levels would increase and there would be lots of people without an income. Perhaps then somebody important may realize that industrial production has to be seriously developed, lots of people should be doing jobs making things which are then exported, and of course by then labor costs will have reduced and price levels will have to be really regulated as well, or a real social security system would have to be put in place and operated—too difficult, I think, let’s just stay “happy!”

    Mike can be contacted at mawootton@gmail.com.

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    7 Comments

    1. The Filipinos are not happy …….the majority has just given up all HOPE !
      Ask anyone is the streets what is in their minds at that very moment. Their reply
      Is universally : TO MIGRATE ! All of them : doctors…nurses…housemaids…
      seamen …….bar tenders…. cooks…..teachers……. The only ones not wanting to leave
      are the national government officials…..they have their hands in the Philippines Treasury and having a ball !

      HOPE in this country is long dead.

    2. Very low wages and abuse of labour protection laws make it very cheap to over man. The worst examples are in the public sector, where in many councils, an army of not needed “casuals” sit around doing nothing, except receiving their payback for political loyalty or being a friend or relative of a politician. The fact that these people are funded from the peoples taxes makes it disgrace.

    3. Eliseo Jr. P.Tenza on

      I am an OFW, and I have stayed in Singapore since 1974. Productivity is the key word in Singapore. In the malls in Singapore, the payment counter is manned by one staff who does the work of the cashier and also packaging the sold items. In SM,
      (Philippines) the payment counter is manned by 8 staff. I told myself where is the productivity?
      After a while,I guessed that what the management is doing is providing employment more than the necessar. If the Philippines becomes so effective, or if productivity improves, we will have more unemployed Filipinos.Unless more jobs are created then we can be productiveBut the Philippines has one million population, how can the government create the number of jobs for this population?

    4. We place inordinate attention, energy and effort on the issue of corruption. We gnash our teeth, pull our hair, swim in tears, stew in anger over corruption, corruption, corruption, nothing but corruption on the mistaken notion that if we could eliminate it, we will become a rich nation as if by magic. Look at the government’s take on other fundamental issues. See any urgency? Incompetence galore is staring them on the face, and they look so disturbingly unaffected like it is some harmless defect. Shout corruption and everybody gets all worked up. I wonder if this extravagant concern for corruption is not indeed just an affirmation of the saying that thieves hate their own kind.

    5. The problem is too many people and not enough jobs for them. We have tried to send them all overseas to work but the limit is being reached. So we must focus on more jobs. The jobs must be created in a business selling in the local market. The Philippine costs are not competitive to support a business in the global marketplace. So that leaves us with local markets (agricultrue, stores, malls, condos, recreational, etc). That is what we are doing now. To do more we must drastically reduce our electric, transportation, and tax costs. Only then can we possibly build companies competitve in the blobal marketplace.

    6. yay., love the images in this article; once more reflects exactly my opinions (fellow brit in philippines). I just ‘love’ 8 staff hanging around in SM trying to sell me socks….ggrrrrr, and then you ask a technical socks questions and noone can answer!! By the way, I dont know anyone in this country that has a proper job!