‘Poor-quality jobs helped lower unemployment’

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TODAY’S hard times make it difficult for Filipino workers to “lose” or change their jobs, no matter if they are of poor quality, and this may have led to an increase in employment and a decline in unemployment in October, according to local economists.

On Wednesday, the Philippine Statistics Authority (PSA) said the country’s employment situation improved, with the jobless rate reaching 4.5 percent in October, the lowest in 17 years. (Full story: www.businessmirror.com.ph/2022/12/07/phl-unemployment-improves-to-17-year-low-of-4-5/)

The employment situation also improved with 47.11 million Filipinos employed. This is 3.28 million more than the 43.82 million recorded in October 2021.

“In the Philippines, many of those in the labor force are desperate for any kind of job,” Action for Economic Reforms (AER) Executive Director Filomeno Sta. Ana III told the BusinessMirror.

“We have millions who are unemployed or underemployed and who have ‘bad’ jobs.”

In an e-mail to the BusinessMirror, former Dean of the University of the Philippines School of Labor and Industrial Relations (Solair) Rene Ofreneo said even if many Filipinos want to quit their jobs, offers and choices are limited.

Ofreneo added that the improvement in the employment numbers, particularly the increase in the Labor Force, only showed that Filipinos needed to get jobs after “the long Covid layoff.”

Based on PSA data, the labor force increased by 2.02 million to 49.35 million in October 2022 from 47.33 million in October 2021. The Labor Force Participation rate, however, slowed to 64.2 percent. 

“Incidentally,  the unemployment rate has been going down from 5 to 4.5 percent. I  have not seen such a figure for a long time. If we reach 3 percent, we might see full employment already,” Ofreneo said. The main problem, he explained, is that the overwhelming numbers are informal in the ever-growing informal sector and informal in the “informalizing” formal labor market. “The explanation is dire: the necessity of surviving and earning kahit papaano, no matter how menial the available jobs are.”

Digitalization

FOR Ateneo de Manila University economist Leonardo Lanzona Jr., indeed, quality jobs remain a problem in the Philippines. This could also worsen as more jobs are taken over by “cheaper digital technologies.”

Lanzona added that the situation could worsen next year with the expectation of recession in many advanced economies. The global economic crunch could prompt firms to do cost-cutting measures to survive, including digitalization.

“The employment rates may remain as they are but the middle income jobs may start to decrease, especially as a result of greater digitalization, or jobs being taken over by cheaper digital technologies. In other words, underemployment can increase as more people shift into lower-paying jobs or the informal sector,” Lanzona explained.

Former Socioeconomic Planning Secretary Emmanuel F. Esguerra also told the BusinessMirror that in order to improve job quality in the country, the government should focus on growing employment in labor-intensive sectors. Based on PSA data, agriculture and forestry saw the largest decline in employment on a quarter on quarter and year on year basis.

Agriculture and forestry lost 511,000 jobs to 9.22 million in October 2022 compared to 9.73 million in July 2022. The sector lost 197,000 jobs from the 9.42 million recorded in October 2021. The PSA data showed the top industry that saw the highest growth in job creation was the transportation and storage sector with 239,000 jobs gained compared to July 2022.

On a year-on-year basis, the top employment creator was the wholesale and retail trade, repair of motor vehicles and motorcycles with 672,000 jobs created compared to October 2021.

“We should be aiming to grow employment in sectors of high productivity. What’s happened so far is that employment has grown or is growing in areas of relatively low productivity,” Esguerra said.

Neda: restrictions lifting helped

Meanwhile, the National Economic and Development Authority (Neda) said the government’s decision to remove restrictions benefited the employment numbers. 

“Our move to finally open face-to-face classes at full capacity has paved the way for us to immediately address the learning losses from the pandemic—this is a precursor to a workforce that demonstrates competence and high productivity. Also, with children back in school, parents-at-home—especially mothers—are also able to pursue more income opportunities,” Socioeconomic Planning Secretary Arsenio M. Balisacan said.

Neda said much of the increase in employment came from the services and industry sectors. Meanwhile, the agriculture sector shed jobs, particularly in agriculture and forestry, as a result of the tropical cyclones in October 2022.

However, Neda said this contraction in the sector was slightly moderated by fishing and aquaculture, which recorded 34,000 additional employment during the period. 

Underemployment

Meanwhile, the underemployment rate fell to 14.2 percent from 16.1 percent in October 2021, or 371,000 fewer underemployed persons. Nevertheless, the number of invisibly underemployed continues to increase as more seek to earn additional income amid the persistent rise in commodity prices.

“While the employment numbers have improved, we recognize that we need to expand efforts towards creating more and high-quality employment by improving workforce employability. We need to do this if we really want to pursue economic transformation,” Balisacan said.

Balisacan also affirmed the government’s commitment to boosting the country’s disaster resilience as the La Niña season is expected to persist until March 2023. These include the effective implementation of emergency employment programs to minimize employment losses, leveraging technology that will improve knowledge-sharing, and establishing preventive and responsive measures for disaster risk reduction and management across the country.

Recognizing the private sector as the country’s engine for growth, Balisacan likewise called for more public-private partnerships to expand skills development and opportunities in the country.

Image credits: Nonie Reyes