March 18, 2004
Dear Sir/Madam,
President Arroyo’s admission that her administration failed to ease unemployment should be seen in light of the constitutional mandate to promote full employment. Not only has government failed to fulfill this mandate, it is moving away from full employment. Despite strong economic growth in the last five years, joblessness has reached levels seen only at the height of the recession that marked the end of the Marcos regime.
If elected, the president promises to create one million jobs a year for the next six years. This is exactly the same approach that failed to lick the problem in the first three years of her administration. Apparently, she fails to appreciate the depth of the labor market crisis.
Consider the following: there are close to 4 million jobless Filipinos. Another 5.5 million workers are underemployed, that is, employed but wanting more hours of work. Still another 3 million people of working age are out of the labor force but are ready to join the search for work should job prospects improve. Meanwhile, the working age population grows by 1.7 million every year. A million jobs a year will not get us anywhere closer to full employment – only deeper into crisis.
In signaling business-as-usual, the president fails to realize that the roots of the current jobs crisis lie in the economic reforms implemented in the last 20 years. Aggressive import liberalization and tariff reduction have made the Philippine economy more import-dependent today than it had ever been. That is why it has become increasingly more difficult to translate economic growth to job growth.
To make matters worse, the government has abandoned its historical task to build a dynamic manufacturing base. Industrial policy became feared words in policymaking circles. The result is creeping de-industrialization, the gradual dismantling of the country’s manufacturing base.
Instead, government has been content to see agriculture and services as the main drivers of growth and employment generation. But without a healthy industrial base, growth and job creation in agriculture and services are simply not sustainable.
The depth of the unemployment crisis calls for change – not continuity – in economic policies. We challenge the political parties to offer concrete proposals that address the unemployment crisis and fulfill the constitutional mandate for full employment.
Daniel Edralin
Chair, Alliance of Progressive Labor
102 Sct de Guia cor Tomas Morato
Quezon City
Showing posts with label unemployment. Show all posts
Showing posts with label unemployment. Show all posts
Mar 18, 2004
January 2004 LFS Results Open Unemployment Rises as Jobs Crisis Persists
The jobs crisis continues to widen as unemployment rose in the first quarter of this year, according to the latest January labor force survey. The unemployment rate hit 11%, up from 10.2% in the same month last year and 10.6% in the previous quarter. Close to 4 million Filipinos were out of work.
The persistently high unemployment rate is proof of the lack of substantive economic growth. Government boasts of outperforming neighboring countries in terms of GDP growth. But performance in terms of creating adequate employment for the growing working age population lags behind other countries.
Labor markets in the three other countries – Thailand, Indonesia, and South Korea – hard hit by the 1998 Asian crisis have since recovered. The Philippines alone continues to wallow in a worsening jobs crisis. The unemployment rate today is higher than it was in 1998. It is at par with levels reached during the 1984-1985 recession, the worst crisis in the countries postwar history.
Hidden unemployment
A bigger problem than open unemployment is underemployment, a desire for additional work hours to compensate for short working hours or low pay. While it has slightly eased in recent years, underemployment remains a massive problem. The number of underemployed workers – some 5.5 million or 18% of the employed, according to the survey – exceeded the 4 million unemployed Filipinos. Equally alarming, some 4 million employed workers actually worked less than 20 hours a week or half the 40-hour workweek standard.
Then there are workers who are jobless but are considered out of the labor force because they are engaged in so-called home production. Mostly women in rural areas who are ready to join the work force in the presence of jobs, they comprise as much as 20% of the nonlabor force or close to 3 million Filipinos of working age.
In all, the jobs crisis directly affects some 13 million Filipinos – 25% of the working age population – who are looking for work. At the same time, it presents problems for those who are employed. With that number of people in the job market, the bargaining power of labor to demand higher wages and improved working conditions.
Weak growth
The persistently weak labor market despite strong economic growth is indicative of a deeper economic malaise. The country’s economic managers say that while the economy has been doing well, growth has not been strong enough to generate sufficient jobs for the fast growing population. The economy simply has to grow faster to reduce the rising employment backlog.
But the problem goes beyond the pace of economic growth. The current recovery cycle that began in 1999 and now six years running is one of the longest growth periods in the last two decades, 1986-1990 and 1992-1997. The 4.5% annual GDP growth in the last six years compares favorably with those of the previous growth periods.
Yet job growth has been measly, making the current growth cycle the worst in terms of job creation. For example, 1% growth in GDP in 1992-1997 generated 1% growth in employment. In the period 1999-2003, 1% growth in GDP resulted in 0.5% growth in employment. Thus, while growth has been higher in the early 2000s than in the mid 1990s, job creation has been slower.
Wrong strategy
The deepening employment crisis can be traced to economic policies pursued in the 1980s and the 1990s, which encouraged import dependence and neglected the development of the country’s manufacturing base. Aggressive import liberalization and tariff reduction opened up the country to a massive flood of imports. Except for brief periods of sudden peso devaluation (following periods of crisis), the share of imports to total domestic supply has been shooting up in the last two decades. And despite the continued devaluation of the peso, the ratio has been rising since 2000.
Rising import dependence has been harsh on domestic industries selling to the local market. At the same time, government abandoned efforts to build a dynamic manufacturing sector. A decent manufacturing sector is necessary to build capacity to compete with imports as well as to create comparative advantage in the export market. It is also the best generator of productive, long-term, quality employment.
Instead government has relied on foreign investment to develop the export sector, specifically electronics production. Yet despite the huge success of electronics export, the industrial sector as a whole has been hallowing out. Its share of both GDP and total employment has consistently declined in the last 25 years. The recovery of industry that became evident in 2001 has proved weak and short-lived.
In sum, rising dependence on imports and the gradual dismantling of the country’s manufacturing base have created the current situation of deepening employment crisis amidst strong economic growth.
by: Clarence Pascual
Researcher Consultant, LEARN
The persistently high unemployment rate is proof of the lack of substantive economic growth. Government boasts of outperforming neighboring countries in terms of GDP growth. But performance in terms of creating adequate employment for the growing working age population lags behind other countries.
Labor markets in the three other countries – Thailand, Indonesia, and South Korea – hard hit by the 1998 Asian crisis have since recovered. The Philippines alone continues to wallow in a worsening jobs crisis. The unemployment rate today is higher than it was in 1998. It is at par with levels reached during the 1984-1985 recession, the worst crisis in the countries postwar history.
Hidden unemployment
A bigger problem than open unemployment is underemployment, a desire for additional work hours to compensate for short working hours or low pay. While it has slightly eased in recent years, underemployment remains a massive problem. The number of underemployed workers – some 5.5 million or 18% of the employed, according to the survey – exceeded the 4 million unemployed Filipinos. Equally alarming, some 4 million employed workers actually worked less than 20 hours a week or half the 40-hour workweek standard.
Then there are workers who are jobless but are considered out of the labor force because they are engaged in so-called home production. Mostly women in rural areas who are ready to join the work force in the presence of jobs, they comprise as much as 20% of the nonlabor force or close to 3 million Filipinos of working age.
In all, the jobs crisis directly affects some 13 million Filipinos – 25% of the working age population – who are looking for work. At the same time, it presents problems for those who are employed. With that number of people in the job market, the bargaining power of labor to demand higher wages and improved working conditions.
Weak growth
The persistently weak labor market despite strong economic growth is indicative of a deeper economic malaise. The country’s economic managers say that while the economy has been doing well, growth has not been strong enough to generate sufficient jobs for the fast growing population. The economy simply has to grow faster to reduce the rising employment backlog.
But the problem goes beyond the pace of economic growth. The current recovery cycle that began in 1999 and now six years running is one of the longest growth periods in the last two decades, 1986-1990 and 1992-1997. The 4.5% annual GDP growth in the last six years compares favorably with those of the previous growth periods.
Yet job growth has been measly, making the current growth cycle the worst in terms of job creation. For example, 1% growth in GDP in 1992-1997 generated 1% growth in employment. In the period 1999-2003, 1% growth in GDP resulted in 0.5% growth in employment. Thus, while growth has been higher in the early 2000s than in the mid 1990s, job creation has been slower.
Wrong strategy
The deepening employment crisis can be traced to economic policies pursued in the 1980s and the 1990s, which encouraged import dependence and neglected the development of the country’s manufacturing base. Aggressive import liberalization and tariff reduction opened up the country to a massive flood of imports. Except for brief periods of sudden peso devaluation (following periods of crisis), the share of imports to total domestic supply has been shooting up in the last two decades. And despite the continued devaluation of the peso, the ratio has been rising since 2000.
Rising import dependence has been harsh on domestic industries selling to the local market. At the same time, government abandoned efforts to build a dynamic manufacturing sector. A decent manufacturing sector is necessary to build capacity to compete with imports as well as to create comparative advantage in the export market. It is also the best generator of productive, long-term, quality employment.
Instead government has relied on foreign investment to develop the export sector, specifically electronics production. Yet despite the huge success of electronics export, the industrial sector as a whole has been hallowing out. Its share of both GDP and total employment has consistently declined in the last 25 years. The recovery of industry that became evident in 2001 has proved weak and short-lived.
In sum, rising dependence on imports and the gradual dismantling of the country’s manufacturing base have created the current situation of deepening employment crisis amidst strong economic growth.
by: Clarence Pascual
Researcher Consultant, LEARN
Dec 22, 2003
Jobs crisis worsens despite strong economic growth
Despite strong economic growth, Filipino workers face poor prospects in the coming year as the current jobs crisis worsens. Yet government has turned a blind eye to the crisis in the labor market. Instead it has focused on economic growth, paid lip service to job creation, and offered lame excuses. We in the labor movement call on the government to address the worsening crisis and ease the plight of the working class.
Evidence of a worsening jobs crisis amid high growth in output is found in the latest economic data. Gross domestic product grew 5% in the third quarter of this year, exceeding government expectations and outpacing our stronger Asian neighbors. Yet joblessness rose in October, raising the unemployment rate for 2003 to 11.4 percent from 11.2 percent in 2002. Unemployment today is higher than in 1998 when the economy was in recession. Since then the ranks of the unemployed has swollen by one million to 4 million today.
But unemployment is only the tip of the iceberg. There are 12 million Filipinos looking for work. The number includes underemployed workers and those outside the labor force but who are willing to work should job prospects improve. And while the economy continues to generate jobs, most of these are marginal, low paying and temporary.
Despite the deepening crisis in the labor front, government refuses to fully acknowledge the problem. Instead it chooses to trumpet the good news of higher-than-expected GDP growth – while ignoring the intensifying jobs crisis.
The success of the million jobs program launched two years ago has proved illusory. Most of the jobs created were temporary. With 12 million workers looking for work, one million jobs hardly makes a difference. In any case, it could not be sustained.
The country’s economic managers attempt to explain the problem away by saying that growth has not been strong enough to lower unemployment. They also point to political instability scaring away foreign investors.
While there is a germ of truth to these explanations, they do not go to the roots of the current labor crisis. And the roots of the crisis lie in the failed development strategy that the government has pursued in the last 20 years with increasing zeal, if with diminishing returns
True, growth is not strong enough to quickly lower unemployment. But it is also true that the economy has become less efficient in generating employment. Liberalization has made the economy produce less and import more, making it more difficult for output growth to translate into job growth.
True, political instability explains a large part of the drastic drop in FDI. But the decline took place in the context of a global slowdown in FDI flows to developing countries since 1999. Not to mention that the Philippines has failed to attract FDI even at the height of global flows. This shows the folly of relying on FDI to revive job creation.
More than ever, it is time to overhaul the country’s failed development strategy. What is needed is a strategy to develop domestic productive capacity, expand the domestic market, nurture dynamic, globally competitive industries, and support local entrepreneurs. Central to such a strategy is the creation of quality employment for the growing labor force, and rising – not falling –wages. After all, providing adequate employment opportunities and improving living standards should be the goals of development.
-Alliance of Progressive Labor (APL)
-Labor Education and Research Network (LEARN)
Evidence of a worsening jobs crisis amid high growth in output is found in the latest economic data. Gross domestic product grew 5% in the third quarter of this year, exceeding government expectations and outpacing our stronger Asian neighbors. Yet joblessness rose in October, raising the unemployment rate for 2003 to 11.4 percent from 11.2 percent in 2002. Unemployment today is higher than in 1998 when the economy was in recession. Since then the ranks of the unemployed has swollen by one million to 4 million today.
But unemployment is only the tip of the iceberg. There are 12 million Filipinos looking for work. The number includes underemployed workers and those outside the labor force but who are willing to work should job prospects improve. And while the economy continues to generate jobs, most of these are marginal, low paying and temporary.
Despite the deepening crisis in the labor front, government refuses to fully acknowledge the problem. Instead it chooses to trumpet the good news of higher-than-expected GDP growth – while ignoring the intensifying jobs crisis.
The success of the million jobs program launched two years ago has proved illusory. Most of the jobs created were temporary. With 12 million workers looking for work, one million jobs hardly makes a difference. In any case, it could not be sustained.
The country’s economic managers attempt to explain the problem away by saying that growth has not been strong enough to lower unemployment. They also point to political instability scaring away foreign investors.
While there is a germ of truth to these explanations, they do not go to the roots of the current labor crisis. And the roots of the crisis lie in the failed development strategy that the government has pursued in the last 20 years with increasing zeal, if with diminishing returns
True, growth is not strong enough to quickly lower unemployment. But it is also true that the economy has become less efficient in generating employment. Liberalization has made the economy produce less and import more, making it more difficult for output growth to translate into job growth.
True, political instability explains a large part of the drastic drop in FDI. But the decline took place in the context of a global slowdown in FDI flows to developing countries since 1999. Not to mention that the Philippines has failed to attract FDI even at the height of global flows. This shows the folly of relying on FDI to revive job creation.
More than ever, it is time to overhaul the country’s failed development strategy. What is needed is a strategy to develop domestic productive capacity, expand the domestic market, nurture dynamic, globally competitive industries, and support local entrepreneurs. Central to such a strategy is the creation of quality employment for the growing labor force, and rising – not falling –wages. After all, providing adequate employment opportunities and improving living standards should be the goals of development.
-Alliance of Progressive Labor (APL)
-Labor Education and Research Network (LEARN)
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