ANALYSIS

Gov’t Destroys .5 M Jobs, Record 5 M Jobless

The just released April 2004 employment figures, including nearly 5 million Filipinos without work, affirm the dismal failure of government economic policy.

By Sandra Nicolas
Bulatlat.com

When the National Statistics Office released the latest Labor Force Survey (LFS) on June 15, Socioeconomic Planning Secretary Romulo Neri seemed to be talking from another planet. He said, “The economy continues to strengthen as labor market demand firms up.” With him, it seems, is Philippine Chamber of Commerce and Industry (PCCI) Chairman Sergio Ortiz Luis who explained, “It does not mean that there are no jobs.”                               

In casually explaining away the bleak April 2004 results, they betray the essential indifference of government and big business to the plight of the Filipino working people.

Net destruction

The bottom line is simply that, in April this year, 10.8 million Filipinos were either out of work or otherwise not earning enough for decent living – 1.9 million more than in April last year. This includes the 4.9 million unemployed and 5.8 million underemployed.

The unemployment rate in April 2003 was 12.2 percent and rose to 13.7 this year. If last year’s already high rate was at least maintained, that would mean 543,830 less jobless this year. As it is though, these over half a million jobs were effectively lost and the absolute number of unemployed soared by 772,000 to a record high of nearly five million. If the government is quick to claim jobs “created,” it should be just as quick to take responsibility for jobs “destroyed.”

But the problem isn’t even just the lack of jobs. Earnings from the jobs to be had are apparently not even enough. The underemployment rate – referring to those looking for additional work – rose dramatically from 15.6 percent in April last year to 18.5 percent this year.

The need for additional sources of income, especially in the face of accelerating inflation, also most plausibly explains the sudden jump in the labor force participation rate from 67.1 percent in April 2003 to 68.9 percent this year.

Which need similarly explains the marked shift from own-account and unpaid family work to wage and salary work: there are 334,000 less own-account and unpaid family work and 1.4 million more wage and salary earners. Yet this is hardly necessarily a shift to more stable or remunerative jobs.

If anything, the indications are for more and more casual, uncertain and low-paying jobs. The number of full-timers working 40 hours and over actually even fell by 67,000 this year, or from 57.3 percent of all employed to 55.1 percent. On the other hand, those working less than 40 hours or not at all increased a striking 1.2 million. Recall also the increase in those looking for more work.

Growth for whom? 

Where then do Neri’s and Luis’ claims come from?

Neri probably remains fixated on the first quarter 2004 economic growth figures – 6.2 percent for gross national product (GNP) and 6.4 percent for gross domestic product (GDP) – which, he gushed, were “the highest growth rates since the 1997 Asian financial crisis.” For his part, Agriculture Secretary Luis Lorenzo was ecstatic about the “phenomenal” first quarter farm and fishery sector growth of 8.2 percent which, he said, was “the highest rate recorded in the past 15 years.”

But these January to March growth rates still did not mean enough for jobs for the people, as the April employment figures starkly show.

The “phenomenal” farm sector growth is especially revealing because a massive 481,000 farming, forestry and fishery jobs were lost: from 6.2 million last April down 5.7 million this year. Much of these must have shifted to casual jobs – the number of laborers and unskilled workers increased by 666,000 – with others simply going out of work. The government’s “globally competitive agriculture,” it seems, has no place for millions of displaced and landless Filipino peasants and their families.

The graduate fallacy

Luis, to explain his claim that there are actually jobs available, overstates the impact of the increase in the labor force due to the end of the school year.

It is certainly true that a little over half of the labor force draws from the 15-24 year old age group, and that many new entrants come from this. However, while the number of unemployed 15-24 year olds increased by 315,000 from last April, the number of unemployed 25 year olds and above actually increased by a much larger 457,000.

Put another way, and contrary to the usual “graduates seeking work” rationalizations, non-school age persons contributed far more to unemployment than school age persons (even if they are a slightly smaller share of the labor force). Moreover, the overwhelming number of students stops schooling before reaching college age so 25 years is even a late cut-off age.

Lies, lies

The employment figures are of course seasonal and vary between the January, April, July and October LFS rounds.

The point though is to compare the April 2004 results with the April 2003 results – and this year’s results are unambiguously worse in all possible dimensions. And more, the January 2004 results were also worse than last year’s: unemployment was higher at 11.4 percent versus 8.7 percent last year. At this rate the last two LFS rounds for 2004 will probably be worse than the comparative periods last year.

Quibbling apologists can always resort to deploring statistics as “lies, lies, damned lies.” Yet the bottom line should be answer enough: there are record high numbers of jobless and job-starved Filipinos. For the people, things just keep getting worse. Bulatlat.com

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