Last May 1, Labor Day was celebrated in the usual fashion: parades and rallies were mounted by different labor groups, even as statements praising the laboring class were issued by the government. A few days earlier, the Department of Labor announced that 115,000 new positions were filled up during job fairs. In the meantime, a few weeks before Labor Day, more than 700,000 new graduates were estimated to have joined the labor force.
As expected, labor unions demanded hefty increases in minimum wages, even as government officials did not give in; they soothingly replied that they will study the issues raised.
Through it all, people either stayed indoors or went to the malls to escape the heat. Those who could afford it fled from the cities and sought refuge in resorts and hotels. For the public, Labor Day was just one of the many holidays mandated by the government.
However, there was a news report which made people sit up and wonder whether last week’s Labor Day should be a day of mourning and not a celebratory holiday. This was the report from the International Labor Organization that the Philippines had the highest unemployment rate in Asia. All media outlets picked up the news item, triggering headlines, interviews, panel discussions and commentaries on the state of unemployment in the Philippines.
The highest unemployment rate in Asia
The ILO report should not really come as a surprise. For years , Social Watch Philippines had been warning about the phenomenon of “jobless growth,” a phrase used by the United Nations to describe economic growth without jobs. Even as the government has been crowing about the high growth in the Gross Domestic Product, civil society organizations and policy analysts have been pointing to rising unemployment.
Civil society organizations, government offices, multilateral institutions, academia and media don’t necessarily agree on policy issues. For once, there is agreement among these institutions: unemployment in the Philippines indeed is rising.
Last year, the World Bank estimated that the government has to create at least 4 million jobs a year to catch up with the rapid rise in the inventory of unemployed. In an earlier column, I pointed out that job prospects for the 2014 graduates are rather dim, considering that 2.96 million jobless Filipinos are competing with them. Aside from the unemployed, 7 million underemployed Filipinos are also seeking full time jobs.
No less than the NEDA Director-General himself has agreed as early as last year that job creation is a formidable challenge primarily for the government. For its part, Social Watch Philippines has proposed that the huge P2.6 trillion budget should be utilized to create jobs and not frittered away in dole-outs, inefficiency and corruption.
Are our workers protected?
Concerns have been rightly expressed about the unemployment issue. At the same time, those who are working are also plagued with problems. Only 25 percent of those who are working are in the formal sector, according to the World Bank; 75 percent are in the informal sector. The calculations of the Employees Confederation of the Philippines are slightly higher—77 percent of those who are working are in the informal sector and only 23 percent are in the formal sector.
These means that three fourths of those who have jobs are not adequately protected since they are not reached by government regulations. They do not necessarily have mandated holidays, minimum wages, health and educational benefits as well as retirement plans.
How about underemployment?
It is calculated that the underemployed in the country number 7 million. These are people who do not work for eight hours a day. Thus, a person who works only one hour a week might be counted among the employed but is actually underemployed. His or her earnings would not be enough to keep body and soul together, especially if there are dependents. Our underemployment rate hovers between 19-20% of those who are employed. A double-digit underemployment rate is considered worrisome.
Unemployment and the misery index
Soon after Labor Day, international media featured the Misery Index for 2013. It is based on a simple formula which calculates the sum of the unemployment rate, the inflation rate and the lending rate minus the per cent change in real GDP per capita. I believe that it should be called the Economic Misery Index since all the factors which are considered are based on economic data.
I have a little problem with the calculation of the real per capita GDP which might not reflect the wide disparity in income and wealth due to high levels of poverty.
The Philippines is ranked No. 67 among 89 countries. Countries which do not have all the necessary data are not included. This probably explains why African countries and those devastated by war are not on the list. Nonetheless, it is obvious that life in these countries is miserable.
If other important factors which lead to misery are included in the index, e.g. poverty, war, and social development indicators are included, perhaps the ranking of the Philippines would be different.
What is interesting about the Index is that in the Philippines, unemployment is considered The Main Contributing Factor. Certainly, when one is unemployed and has to depend upon others to be able stay alive, life can be truly miserable.
A summit on employment?
There are proposals that a summit on employment should be convened to formulate comprehensive solutions to this threat of continuing unemployment. The proposal is to call three major sectors—the government, labor unions and the business sector. I would suggest a fourth sector—civil society organizations and media. After all, only a small portion of the working class is unionized. The rest of the Labor Force is composed of the unemployed and the underemployed.
Now that the major players are all agreed that unemployment is a major challenge, the time has come to agree and coordinate on policy initiatives and programs. For starters, why don’t we start with the huge, lump-sum-filled P2.6 trillion budget?