PRESIDENT Rodrigo Duterte in his official Labor Day message stated that, “The Department of Labor and Employment takes the lead in ensuring that thousands of jobs will be created locally … as we tap the skills, experience and expertise of our own people” (Presidential Communications Operations Office website). Against a backdrop of lower rate of joblessness during the first quarter of the year—from 25.1 percent in December 2016 to 22.9 percent, or 10.4 million adults at present (Social Weather Stations)—and the sustained growth rate of the economy, there is reason to be optimistic.
Hunger rate decreased from 13.9 percent to 11.9 percent in the same survey period (SWS). However, the number of self-rated poor families increased significantly, from 44 percent to 50 percent (11.5 million families, SWS). The self-rated poor rate had otherwise been declining consistently since September 2014, from 55 percent to 42 percent in September 2016, the lowest level in decades. Obviously, many employed Filipinos don’t have enough disposable income to make ends meet. Organized labor is demanding higher minimum wages so that workers can adequately provide for themselves and their families.
Security of tenure is another contentious issue for organized labor. Under the Duterte presidency, contractualization—especially labor-only contractualization—is swiftly coming to an end. DOLE issued Department Order 174 last March spelling out under what terms and conditions certain forms of contracting and subcontracting would still be allowed. Establishments engaged in contracting and subcontracting must have a minimum capitalization or assets worth P5 million. These companies must register with DOLE and pay P100,000 in registration fee, valid for two years.
In response to organized labor’s criticism of DO 174, President Duterte has announced that he will have the order reviewed. However, he also emphasized that there are businesses, especially agricultural, that require seasonal workers (The Manila Times, May 2).
Few would argue against the proposition that the country needs more, better paying, and stable jobs and income-earning opportunities. However, are we really promoting job creation by imposing so many conditions and restrictions on employers? In an economy with full or near full employment, workers will shun the poorly paid, unattractive jobs and seek the better ones – because they have a choice. With high unemployment and lack of jobs that match our skills—majority of unemployed did not reach tertiary-level education (Philippine Statistics Authority Labor Force Survey, January 2017)—millions of job seekers are left with few choices, if at all. What is better, to be unemployed or to have a poorly paid job?
A friend – let’s call her Virgie – is a subcontractor in Mandaue City, Cebu’s industrial capital. Her business is involved in supplying house and garden wares to a small export company. Hundreds of subcontractors supplying this and other export companies have come and gone over the years. Cebu’s exporters of furniture, shellcraft, fashion accessories, house and garden wares have seen much better days – so subcontractors like Virgie are happy when there is an order.
The export company looks for buyers abroad and develops the designs. It supplies the materials needed for production, making it attractive for micro businesses that have limited capital to become subcontractors. The hand drills, grinders and other simple tools used in production are owned by Virgie’s enterprise which rents the shop where production is done—and rent is due even when there are no orders such as this time of year, the lean season. Usually, the lean season lasts three months.
Virgie’s some 30 workers are paid per piece for each product that they finish. Most of her workers did not reach high school. While the P4,000 to P10,000 pesos they typically earn in a month is below the minimum wage, it is still this kind of income opportunity that compelled the workers to migrate from the province to the city. There are times that Virgie finds the rates paid by the exporter too low considering the time it takes to make the items, but she also knows that the exporter has to be competitive – other countries with lower labor costs produce the same types of products.
Recently, DOLE called the attention of the exporter to DO 174 and its provisions concerning “substantial capital” (P5 million), compliance with minimum wage rates (computed through time-motion studies if workers are paid by piece), security of tenure, benefits, P100,000 registration fee, among others. This, Virgie tells me, worries exporters and subcontractors alike. How can they comply?
But aren’t people like Virgie—ordinary middle class Filipinos—the very ones referred to by President Duterte as “our own people” whose “skills, talents and expertise” the nation would like to tap for the creation of thousands of jobs locally? We need policies and programs that encourage and support local entrepreneurs so that they may become more competitive and productive, hire more people, pay better salaries and generate more tax income for the government.