Low Jobless Rates Hide
Worsening Labor Conditions
Lower figures do
not mean less jobless Filipinos, but merely the result of government’s
revised and more stringent definition of unemployment
By Joseph Yu
Posted by Bulatlat
Government recently announced unemployment
figures that are substantially lower than those recorded in past labor
survey rounds. But these figures should not be a cause for celebration
because they actually conceal the country’s deteriorating labor
According to the July 2005 Labor Force
Survey (LFS), some 2.72 million Filipinos were unemployed, or a nationwide
unemployment rate of 7.7 percent. This was substantially lower than
unemployment figures recorded in past recent LFS rounds.
But these lower figures were the result of
a new, more stringent definition of unemployment, which the government
said it adopted to align local employment figures with international
Starting with the April LFS, the
unemployed include persons 15 years and above who are without work and are
currently available for work and seeking work, or are not seeking work due
to the belief that there is no work, but sought work within the past six
In the old definition, the unemployed are
defined as those without work and seeking work or not seeking work because
they believe there are no work and other valid reasons such as bad
weather, temporary illness/disability or waiting for the results of a job
application. Those who were without work and not actively seeking work
were no longer automatically included in the labor force and unemployment
The stricter definition naturally results
in lower unemployment figures without government having to actually
generate jobs. For example, despite the lower unemployment figures, only
889,000 new jobs were created from July 2004.
Obscuring the true employment situation
Hence, the new definition actually
obscures the true extent of joblessness in the country. Under the old
definition, the unemployment rate for July would be 10.9% or an
unemployment level of almost 4 million. The difference of 1.3 million
Filipinos between the two definitions doesn’t mean that they were
gainfully employed, but simply that they were no longer considered part of
the labor force and hence were no longer counted as unemployed even if
they remained jobless.
But even official employment figures
underestimate the actual amount of productive work in the economy because
of the government’s loose definition of employed. According to the NSO,
the employed include persons who have worked even for only one hour
during the past week before the survey period or persons who may not have
worked at all during the week prior to the survey but may actually have
jobs or businesses they are temporarily not attending to.
Government justifies this reference period
by arguing that in the Philippines, an underdeveloped country, one hour of
work is already important since a person can generate much needed income
for their family even in such a short period of time.
Hence, a college student who helps in a
small family-owned business for short periods after her classes would be
classified as employed even if he or she were not actually gainfully
It should also be noted that government
does not count overseas Filipino workers (OFWs) in determining local
employment and unemployment even if the phenomenon of overseas work is a
by-product of the lack of jobs in the country. Government justifies this
exclusion from labor surveys by saying such surveys are conducted to
measure domestic employment; since OFWs are employed abroad, it is logical
to exclude them. But this misses the point that these workers leave the
country because they cannot find jobs here.
Worsening labor situation
Local job scarcity is further aggravated
by the deterioration in the quality of employment as seen in the
increasing number of underemployed workers. The underemployed include
those who work less than 40 hours a week and those whose salaries are not
enough to meet their needs and hence have to find additional income.
Underemployed workers increased to 6.7 million in July 2005 from 5.6
million in the same period last year.
The high number of underemployed also
highlights how wages have remained stagnant relative to the high and
rising cost of living. For example, the prevailing legislated daily
minimum wage in Metro Manila is P325, of which P50 is an emergency
cost-of-living allowance which is not included in the computation of 13th
month pay and other benefits.
But IBON estimates that the daily cost of
living for a family of five in Metro Manila as of August is P531.03,
substantially more than the minimum wage. It should also be noted that the
purchasing power of the peso (or the amount of goods and services P1 can
buy) is down to 75 centavos.
The combined effect of high prices and low
wages has resulted in increased unrest among workers, as seen in the
higher number of workers involved in strikes and lockouts this year.
Although the number of strikes as of June 2005 fell to 12 from 13 in the
same period last year, the number of workers involved increased by 80% to
4,601 from 2,550.
But workers’ power to defend their rights
by organizing themselves into unions has also decreased due to widespread
contractualization, or workers being hired under short-term contracts.
Although there are no official figures on the extent of this practice, one
indicator of how prevalent it has become can be seen in its use in the
ShoeMart (SM) chain of malls of Henry Sy, among the country’s largest
According to a 2003 position paper of the
union Samahang Manggagawa ng Shoemart (SMS), SM employs 20,000 contract
workers and only 4,000 regular employees. These contract workers (called
“trainees” by SM management) are dismissed every three months and replaced
by new workers to avoid being regularized and avoid paying benefits and
Maintaining a workforce composed mainly of
contract workers also prevents unionization from gaining a strong foothold
in SM, since contract workers are prohibited under the law from joining
unions. This practice is not limited to SM but is prevalent in other
retail establishments as well.
By altering the definition of
unemployment, government understates the true extent of joblessness in the
country. According to IBON’s estimates, the employment rate is actually
less than 60 percent compared to the official 92 percent rate.
Furthermore, 18.5 million workers, including overseas Filipino workers and
those potentially employable but not included in the labor force, scarcity
comprising more than 40 percent of the total labor force suffer from local
By obscuring the true state of joblessness
in the country, government hopes to conceal its lack of political will to
attack the structural causes of widespread unemployment in the country.
For example, it chooses to become a top global exporter of labor instead
of undertaking a national industrialization program that would provide
genuine employment opportunities for Filipinos. IBON Features/Posted by
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© 2005 Bulatlat
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