Mixed signals on jobs

Ben D. Kritz

Ben D. Kritz

Earlier this week, the government provided us with two rather strange pieces of news from the jobs front. On Monday, the Department of Labor and Employment announced that 15 occupational categories would be opened to foreign workers, citing a shortage of qualified Filipino personnel. Then on Tuesday, a report based on data from the Department of Trade and Industry and the National Economic Development Authority was published by ABS-CBN, identifying the top 10 job-creating sectors for the period 2013-2016.

The two stories were both met with the same question from a skeptical public: If there are or will be jobs available in the Philippines, then why does the country continue to pursue a policy of sending its best workers out of the country to find employment? The expansion of occupations open to foreign workers struck a particularly sour note since many of the jobs on the list are not only jobs Filipinos are known to be skilled at but occupations that are popular among overseas workers. And the projected job growth figures, while implying that prospects for the labor economy are bright, actually revealed that a deeper unemployment crisis is in the offing.

Whatever the Aquino administration’s intentions actually were, the two stories come across as hastily contrived spin to counteract news of a sharp increase in self-rated poverty in the country. For at least the past two years, President Aquino has stubbornly clung to the illusion that there is not actually an unemployment “problem” in the Philippines, but merely a “skills mismatch” between job-seekers and hundreds of thousands of available jobs. The explanation given by Labor Secretary Rosalinda Baldoz for the move to open more occupations to foreign workers certainly followed that script; while pointing out off-handedly that the occupations on the list are “numerically small within the total workforce,” Baldoz nonetheless suggested there are a large enough number of them that they cannot possibly all be filled by the Philippines’ 40-plus million workforce.

One of the 15 occupations on the list of “newly liberalized” jobs particularly reveals how dubious the government’s assertions are.

According to the new guidelines, foreign pilots can now be employed by Philippine carriers, but why any foreign pilot worth his salt would want to work here is a complete mystery. Philippine Airlines has struggled to keep qualified pilots—to the extent that it has had to approach the Labor Department to try to find ways to prevent them from leaving through regulatory means—since at least 2010, when a large number of pilots quit en masse, citing low pay and abusive working conditions. Cebu Pacific has not had quite the same scale of the labor problems as its troubled competitor, but it is not regarded as an especially superior working environment for flight crews, either.

It is highly unlikely that pilot jobs that are unfilled in the Philippines because of comparatively unattractive terms of employment will be filled by foreign pilots who are employable anywhere else. Much the same could be said of the other skilled occupations on the list. Far from being a real shortage—if a numerical shortage even exists, which is doubtful—the lack of skilled workers is the self-inflicted result of a labor environment that is distinctly unfriendly to workers, characterized by weak job security, uncompetitive pay and ridiculous amounts of red tape.

The announcement of the opening up of more jobs to foreign workers was mainly just ridiculous, but the news (delivered in reader-friendly infographic form) the next day about the anticipated number of jobs to be created in 2013-2016 was actually alarming. According to the data provided by the DTI and NEDA, the top nine business sectors will create 4.45 million jobs in that four-year period, or an average of 1.13 million jobs per year. That’s nice, but the problem is the workforce is expanding at a rate of about 1.75 million per year; if the forecast is accurate, that means the number of unemployed will be increasing by up to 620,000 per year.

Some of that number will find work overseas and a significant part of the rest will be soaked up in the government’s statistical gymnastics involving manipulation of the labor force participation rate, the underemployment rate, and loosely defining employment to count occupations such as unpaid internships as actual jobs. Nevertheless, the conclusion that the country is falling short of keeping up with the needs of its own economy is inescapable.

And it is not just the numbers; it is also what is missing from the top job-creating sectors, and the proportions of the numbers of jobs the rest are creating that are causes for grave concern. Notable for their absence are critical sectors such as agriculture, manufacturing, and construction, economic activities that have large added-value because of the complementary businesses they support. As for the sectors that will create jobs, more than 50 percent of them (2.5 million) are projected for the tourism sector—restaurants, hotels, resorts and related services that are, apart from retail, the jobs most affected by low wage and contractual labor regimes. Information technology and call center jobs are expected to increase by 1.3 million—but of that number, approximately 915,000 are the lower value-added latter. Altogether, of the number of new jobs anticipated between now and 2016, more than three-fourths of them (76.7 percent, to be exact) will be in the least productive third tier of the economy.

Nice try, government, but real jobs are not created by issuing press releases and statistical forecasts. I’d say go back to the drawing board, but the Aquino administration’s planners have been sitting in front of it for more than three years; the prospects are not promising that they will suddenly discover how it works now.



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