Job creation volatile, mostly of poor quality work

Research group IBON said that the recently reported job
generation is mostly in poor quality work and confirms volatile labor market
conditions rather than a strengthening economy. The group made the statement after
the recent release of seemingly favorable employment figures and warned against

The Philippine Statistics Authority (PSA) reported an
increase in the number of employed by 2.3 million and an increase in the number
of unemployed by 103,000 in July 2019 from the previous year. The employment
and unemployment rates stayed the same as last year at 94.6% and 5.4%,

IBON however said that the extreme volatility in the labor
market since 2016, for instance, should temper overenthusiasm that the economy
and the labor force situation is improving. Millions of Filipinos are making do
with poor quality work and hundreds of thousands more are in and out of work.

The group recalled that the reported 2.3 million additional
employment in 2016 reversed to 664,000 net job losses in 2017. In 2018, 2.4
million new jobs were reported generated in the January labor force survey
round, measured year on year, but this reversed to 218,000 net job losses in
the October round. The situation remains as volatile so far this year, ranging
from 387,000 net job losses in January 2019 to the recently reported 2.3
million job creation in July 2019.

This volatility indicates Filipinos struggling to find work
where they can on a day-to-day basis rather than a strengthening economy
creating steady jobs paying decent incomes, IBON stressed. Looking at employed
persons in terms of hours worked, 2.2 million or an overwhelming part of the net
2.3 million additional employed in July 2019 was actually just in part-time
work of less than 40 hours. This caused the share of part-time work in
employment to markedly rise from 28.2% to 31.8 percent.

Looking at employed persons by class of worker, IBON pointed
out that the biggest employment increases were actually in low-earning,
insecure, and informal work, as well as in unpaid family work. The number of
self-employed without paid employees grew by 1.1 million and the number of
unpaid family workers grew by 854,000.

Finally, IBON said that looking at the three biggest
job-creating sectors also does not give confidence. The sectors creating the
most jobs included wholesale and retail trade which grew by 820,000, and
accommodation and food service by 292,000. These subsectors are notorious for
high informality and uncertainty, the group said. IBON noted the 716,000
increase in agricultural employment but pointed out that this is likely only
momentary because agricultural employment is in long-term decline especially
from lack of government support for the sector.

IBON also commented on the underemployment rate falling significantly
from 17.2% in July 2018 to 13.9% in July 2019. This is equivalent to the 7
million underemployed last year falling to just 6 million this year. The group said
that while falling underemployment is commonly used as a proxy for improving
quality of work, the latter is not necessarily what is happening.

Underemployment refers to employed persons wanting
additional hours of work in their present job, an additional job, or a new job
with longer working hours. IBON explained that the large drop in the
underemployed is possibly only because workers are already working such long
hours that they do not want additional hours in their present job, cannot take
on an additional job, or cannot imagine a new job with even longer hours.

The breakdown of reported underemployed persons is not inconsistent
with this, the group said. The number of those working 40 hours and over in a
week, or the invisibly underemployed, fell by a huge 1.5 million from 3.7
million in July 2018 to 2.2 million in July 2019. Those who worked less than 40
hours, or the, visibly underemployed, meanwhile, increased by 352,000, hence
the net decrease of some 1.1 million total underemployed.

IBON said that while more employment is always desirable,
government should ensure that jobs are decent and sustainable. But as long as
government neglects the development of domestic agriculture and industries to generate
stable and quality work, the jobs crisis will continue to worsen, and Filipinos
will keep grappling with poor job prospects. ###

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