World Bank: Unemployment is not the problem, underemployment is

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The World Bank said, in response to the growing concern of unemployment in the country, that the problem in the employment in the Philippines is not unemployment, but is underemployment.

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Karl Kendrick Chua, World Bank Philippines senior economist, told reporters on Friday that most of the labor force registered under unemployed “have college degrees that can afford to be unemployed for the meantime.”

“The real labor problem in the country is not the unemployed. It is the 20 percent of workers who are underemployed because these people cannot afford to be without work,” Chua said, referring to the 20 percent underemployed included in the 93 percent employed persons at present.

“[The underemployed workers are] mostly the poor and the people from agricultural sector. If [the country]focuses on the underemployed, there would be a significant change in reducing poverty,” he added.

According to World Bank’s 2013 Philippine Development Report, a total of 14.6 million jobs are needed in the next four years for the 7 million underemployed, 3 million unemployed and the annual 1.15 million additions to the labor force.

The report further said that with sustained gross domestic product performance of 7-percent growth per year and constraint removal from fast-growing sectors like the business processing outsource (BPO) industry, then the “formal sector will be able to provide good jobs to around 2 million people in the next four years or around double the current figure.”

“BPOs and remittances are nice but they do not provide jobs to the lower 50 percent [of the labor force]. Focus on the agricultural and labor intensive manufacturing sectors are essential,” Chua said.

“Creation of quality jobs drive development. They are not just a by-product of economic growth. Jobs can transform societies especially in helping lift people out of poverty and improve living standards,” said Axel Van Trotsenburg, World Bank East Asia and Pacific vice president, in reference to the 2013 World Development Report.

“The challenge is to create more than one million good jobs per year that will provide the basis for a better future for Philippine job seekers,” Van Trotsenburg added

On the other hand, Chua mentioned the revisiting of the Labor Code and looking into the security of the workers especially the underemployed to save them from being under contractual deals and end up with no work after 5 or 6 months.

“We could revisit our Labor Code to see on how to make our labor policies more flexible… [Businesses should consider] 1- or 2-year contracts instead of 5 months and moving them around, and they would be unemployed for less than a month,”

The Labor Code of the country requires 5 or 6 months on probationary period for workers before they are considered to be regular workers. KRISYN NIKA M. LAZO

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