Ending ‘endo’—a path to prosperity or poverty?

REMOVAL of ‘endo’, or contractualization, is not as simple as proponents want it to be because it has major implications on the employment situation and, hence, on poverty as well.

Without careful study, some workers who are normally working under the current labor contractual arrangements could end up on a path toward poverty.

This is why government action is needed on the policy front, and to balance against such undesirable outcomes, three essential policy counter-measures should be put in place—namely, cheaper food available to workers, especially rice; more private investments at home, including foreign direct investments; and acceleration of infrastructure investments.

To achieve the first, a revamp of NFA policies concerning the import and sale of rice in the domestic economy should be in order. The country should rely on ASEAN as its food security basket while attempting to improve domestic agriculture.

To get to the second, a revamp is also needed on (Board of Investments) BOI policies, especially on incentives on investments and amend the constitutional provision to remove the restrictions on foreign direct investments. 

Of course, to get the third, government needs to accelerate infrastructure investments, which in fact is the current marching order of the Duterte administration. 

Constructing infrastructure projects will take focus, time, and more time, while under implementation. While construction jobs will help multiply employment, the final impact on making the economy more internally efficient is not instant.

 

Practice of contractualization

The labor surplus in the Philippines and the phenomenon of high unemployment and underemployment can be likened partly to the problems of labor in Europe and the Middle East, where relative economic stagnation and high unemployment had persisted over decades.

In Europe, labor market rigidities and highly generous labor laws have created high unemployment rates and economic stagnation. But labor policies back here in the Philippines allowed temporary employment contracts while labor outsourcing helped produce an increase in employment.

Without reforms in labor contracting, the economic stagnation and the high unemployment rates would have been far worse.

The survey also revealed that most workers are satisfied with their jobs (90 percent); their social security, Pag-Ibig and Philhealth benefits are included and 93 percent receive the minimum wage, their holiday premiums, and their 13th month pay (pro-rated?). They scored less in terms of benefits enjoyed by the regular workers.

It may be that the idea of gross injustice about ‘endo’ is not fully shared by many workers. The fact that they have jobs would be sufficiently satisfying even though there is no job security.

 

Transition to regular work

Contractualization has been a useful path toward the regularization of employment. Records indicate half of all temporary workers experiencing ‘endo; take between four and eight quarters (or one year to two years) to find regular employment.

This is not a high figure given the length of time it takes to transition toward a regular job. 

But if endo is abolished, will it not take an even longer time before frustration sets in and destroys the hope for the job seeker?

There is danger that should ‘endo’ be ended, the number of unemployables will find themselves mired in poverty.

Incidentally, those who suffer this fate are mostly the less skilled and less educated. Workers with higher educational attainment have a faster route toward more steady, regular jobs.

The main proponents of ending contractualization are leaders of organized labor. They are employment insiders, those who have jobs.

In addition, they seek to raise the minimum wage by P125 per day across the board. This and the abolition of endo are likely to cause more unemployment.

In a labor surplus economy like what we have, such demands are made mostly by ‘insiders’ to improve their welfare even if it means that ‘outsiders’, or those seeking jobs, will further be excluded from jobs.

The openly- unemployed who comprise seven percent of the labor force and a great segment of the underemployed (representing 25 percent of the labor force) are the ultimate ‘outsiders.’ 

These are Filipinos who suffer the ultimate consequences of poverty and low level lifetime incomes.

Organized labor needs to come around from this ‘exclusivist’ posturing and seek job promotion and support the government in opening the economy, increasing investments, including foreign investments, and in loosening part of the labor laws so that employment and the well-being of all can be achieved.

 

 

 

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