Employment rate drops in January

THE losses in agriculture caused by natural calamities led to declines in employment rate in January 2017, from 94.3 percent (in 2016) to 93.4 percent during the comparative period.

In a report, the National Economic and Development Authority also said the whole unemployment rate in the country increased to 6.6 percent in January 2017 from last year’s 5.7 percent. 

While higher than the previous year, it is lower than the average of 7.4 percent recorded from 2006-2015.

The January 2017 Labor Force Survey (LFS) of the Philippine Statistics Authority showed that the decline in employment rate translated to 39.3 million employed Filipinos, which is 1.34 million or 3.3 percent lower than in January 2016.

 

Agriculture Sector

“We mainly observe the employment losses in the agriculture sector, which has been greatly affected by typhoons Nina and Auring that hit our country last December and January,” said Socioeconomic Planning Secretary Ernesto M. Pernia.

Agriculture, he said, accounts for the second largest share of total employed at 25.5 percent, which has shed an estimated 882,000 workers or two-thirds of the employment losses.

“The government must focus interventions to diversify the sources of income of our workers in the agriculture sector, increase labor participation of women, and address youth unemployment and underutilization,” he added.

Underemployment or those employed but wanted more work to augment incomes, improved to 16.3 percent or 1.6 million workers lower from last year’s 19.7 percent. This is lowest rate recorded for all LFS January rounds since 2006.

 

Unemployment

The increase in unemployment rate is also partly due to the temporary loss of election-related jobs. This pattern was also observed in January 2011, a year that followed the 2010 elections.

Also, the increase in unemployed Filipinos came from those with elementary education only (+128,000), followed by those with high school education (+88,000).

Youth and adult unemployment rates also went up to 15.6 percent and 4.8 percent, respectively, but the bulk of the increase in the unemployed came from adult workers (181,000).

 

Critical Interventions

“Critical interventions to address youth unemployment are enumerated in the Philippine Development Plan 2017-2022, particularly to reduce the number of the youth who are neither studying nor employed nor in training,” said Pernia.

He noted that scholarships and strengthening of linkages with vocational and technical schools and state universities/colleges offering TVET programs will provide access to a greater number of trainees.

“Policy and regulatory changes can also adversely affect employment. Government must continue skills development and retooling programs through continuing education and training for the affected workers, and adjust policies where warranted,” said Pernia.

 

Ibon Report

In May 2016, the Inquirer published an independent research of Ibon showing the Philippines having the worst unemployment rate despite high GDP (gross domestic product) growth of 6.9 percent.

Ibon said economic growth “should not be used to divert public attention from fundamental problems of chronic joblessness and poverty.”

The same report said the number of underemployed and discouraged workers is also rapidly rising, noting that underemployed Filipinos increased by 847,000 to 7.7 million in January 2016 from the same period last year.

Ibon added that the labor force participation rate or the share of the working age population working or looking for work “has fallen to crisis levels,” as it hit 63.4 percent in January 2016, which was “practically as low as the 63.3 percent in January 2009 or right after the 2008 global financial crisis.”

“It is already the lowest in over 30 years since averaging just 62.9 percent annually during the 1981-1985 economic crisis in the closing years of the Marcos dictatorship,” the group said.

Ibon said the labor force grew only by 487,000 despite the working age population growing by 1.1 million in January 2016.

 

Ending Endo

Though recent government pronouncements showed that President Duterte has ordered the Department of Labor and Employment to end contractualization, or commonly called end of contracts (endo), a majority of people do not believe that this could be done with government itself as the biggest formal contractualization practitioner.

At best, what could result from department regulations on contractualization is a change in nomenclature but in practice, endo would still be very much around, unless government proves its sincerity to eradicate it.

Contractualization— popularized in government and now widely- institutionalized in the private sector— carries terms like contractual, trainees, apprentices, helpers, casuals, job orders, piece-raters, rank and file, agency-hired and project employees. They are hired at usually lower rates and with less (if no) benefits and they usually last for three to six months with little certainty of being taken in again.

 

Contractual Types

Contractual employees do most of the jobs of regulars in business or government operations as such are being exploited and robbed of wages and benefits due the regulars.

A second form is a contractual hired directly or through an agency, through a labor-only contracting scheme where the hired worker is not given the recognition of “employer-employee” relationship by the company.

Thirdly, the employer can hire contractuals on a daily basis, per piece or per job order basis as in the case of sub-contractors and concessionaires.

The fourth is “permanent casuals” or those who work beyond six months or several straight years in private companies and government agencies.

Though contractualization was practiced for many years—among construction, maintenance and security companies—it became more pervasive ultimately becoming the norm in the country. 

Practically every sector in the economy is now using contractual labor—mining, manufacturing, banking and finance, healthcare, BPO and information technology and communications, retail, media, insurance, food and beverage, manpower deployment, logistics and services.

 

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