As the unemployment rate dropped to six percent in October, a celebratory mood should have been the national reaction. While a five percent unemployment figure would have been more ideal, a six percent rate is definitely not a small feat, given the double-digit unemployment rates in more mature, more developed economies. So, why was there no chest beating from the usual suspects who tout every minor economic spout as the equivalent of the second coming?
With a six percent unemployment rate and a near to seven percent growth rate, there are, theoretically, so many things to boast about. A country that endowed, given the gloomy international jobs environment, has earned its bragging rights. And ours is a country that has not run short of these hyperventilating braggarts of boom. Where, indeed, are the marching bands that are supposed to trumpet the improving job picture?
The answer? It is a fragile figure with dark underpinnings. Once you break down the employment rate to see where the bright spots are, you will be terribly disappointed.
The first giveaway in that six percent figure is not a cause for rejoicing: According to the news reports, 84 percent of the employed are in the services sector (53.7 %) and in the agricultural sector (30.8%).
So many things are clear with a job environment that lists services and agriculture as the primary employers.
One is that the majority in that 84 percent are underpaid. A significant portion, this is a certainty, are paid slave wages, anywhere from P250 a day to a few pesos short of the minimum wage in the regions of employment. There are sectors that pay well—the BPOs for one. But the BPO jobs are the exceptions rather than the rule.
Second. Among those classified as gainfully employed by the government statisticians are the contractual workers. These work on a tenure of less than six months, are cut-off, then renewed again. Or, sent out into to pound the streets for new contractual, dead-end jobs. Contractual work is evil but that is the refuge of the majority of the jobless youth. It is better than nothing but for those without options, contractual jobs are lifelines.
We are all aware of the young holding dead-end jobs and the hopelessness of their conditions. At the pay counters of the department stores, they are the baggage boys, dressed in gnarled polyester pants and t-shirts, their take-home pay barely enough for food and transport fare. At the fast-food chains, they brandish their work tools— mops and detergents—which they wield and spray with intensity or else the customers would complain about stubborn grime and grits.
Even at the high-end stores, even with their cheap black pants and ties, one can distinctively see the marks of low wages and poverty. The service and retail industry in the country is generally staffed with low-wage and underpaid workers on whose backs the fortunes of the country’s few dollar billionaires are built.
These are not the desired high-skill and middle-skill jobs whose existence in the labor market guarantees the presence in a particular society of a strong and viable middle class. The de factor middle class is elsewhere, in the overseas diasporas. The OFWs, in the absence of a viable center, are the de facto center. But their significant stake in the country has been propping it up economically. And the consumption-fueled growth is fed by the spending power of their families back home.
As the middle-skill jobs disappeared, so did the trade unions. The number of organized workers with collective bargaining agreements (including those signed by the yellow unions) is at a single digit, down from the 15 per cent level a few decades ago. Is it a high single digit or a low single digit? That, we do not know. But it is a fact that more than 90 percent of the Filipino workers do not have the right to collectively bargain.
The evisceration of the trade unions started as contractual workers came in full bloom and manufacturing plants disappeared. The industrial foundry of the nation crumbled at the time the malls and the fast-food chains ascended. Jobs in rubber, steel and chemicals gave way to dead-end jobs at the malls and the fast-food chains.
The architecture of the economy favors service and retail jobs, which means dead-end jobs with slave wages.
What is the underemployment figure, the realistic one, and not the understated 18 plus percent? What is the labor force participation rate? What is the total number of able-bodied Filipinos of work age who altogether have permanently dropped out of the labor force.
We don’t want accurate answers to the two questions or else the phoniness of the whole “6 % “ unemployment rate will be exposed.
The country is an ideal laboratory for the study of income inequality, in which growth of income from labor has been flat or marginal and the growth of income from capital has been extraordinarily high. I think that it is worse than the income gain profile of the US between 2009 and 2012. During that period, 95 percent of US income gains was sucked up by the top 1 per cent, but within this primarily by the top 0.01 percent.
The dark underpinnings of the 6% unemployment rates are probably the reasons why the braggarts of boom have refused to beat their chests reveling in that figure. It was a figure built on the mirage of dead-end jobs and slave wages.