No Free Lunch

Not so bad, but not so good either

A+
A
A-

Jobless Filipinos breached the three-million mark last April, according to the quarterly Labor Force Survey (LFS) of the National Statistics Office (NSO). Coming with a stellar 7.8-percent economic growth in the first quarter, it seemed to negate what would otherwise be a streak of good economic news that we hadn’t seen for a while. In my usual “PiTiK test”—for  presyo  (prices),  trabaho  (jobs) and  kita  (income)—the good news is two out of three. Inflation has been low and steady (at 2.6 percent), aggregate output and income have been growing fast and accelerating, but—and this is the black eye—jobs appear to have declined.

The April LFS data showed total jobs falling by 21,000 since last year. Last October, the LFS reported a shocking 882,000 year-on-year job decline. The January 2013 data reflected a more reassuring 606,000 year-on-year gain. But one has to be alarmed when the data reflect actual job contraction in two out of the last three consecutive quarters, whereas we should be consistently expanding jobs by about a million every year to match the number of new labor force entrants. Recently, I ventured that against the impressive output growth numbers, these job numbers didn’t make sense. Well, it turns out there’s a simple explanation for the puzzling data, and President Aquino had in fact painstakingly tried to explain it himself when the jobs data were released. But it seems hardly anybody listened to, or understood (or maybe believed?), his quite logical explanation.

The story is familiar to me because I distinctly recall having had to explain the exact same thing on at least one occasion back in the 1990s when it was still my job to announce and interpret these data, as then head of the National Economic and Development Authority. Last April’s LFS data showed the agricultural sector losing 624,000 jobs, even as industry and services posted otherwise impressive gains of 224,000 and 380,000 jobs, respectively, over the past year. But it turns out that the agricultural job head count taken last April was not directly comparable to the same head count taken in April 2012. It’s somewhat like measuring your weight on an empty stomach today, after having measured it yesterday following a big meal, and believing that your diet is working because the scales say you’re one pound lighter.

In the case of the LFS, the jobs survey will normally take place within the cropping season, especially for our major crops of rice and corn. The employment survey was apparently taken at the height of the planting season last year. This year, however, the NSO says that the survey was taken when there was still little farm activity. This was because either climate-change-induced shifts in weather patterns or simply unusually adverse weather this year had prompted a delay in the cropping timetable. The result, then, was like the dieter’s dubious weight loss. That the recorded job loss in agriculture was so large seems to lend credence to the explanation. Given this, I’m inclined to think that the apparent decline in actual number of jobs from last year’s levels was actually illusory. The jobs picture wouldn’t be so alarming if, instead of the dubious loss of 624,000 farm jobs recorded, we instead used the actual average yearly increase of around 100,000 farm jobs, based on the past six years’ data. Rather than losing 21,000 jobs in aggregate, then, we would have actually registered a gain of more than 700,000 jobs last April—not so bad, but then still not so good either.

Even with this adjustment, there remain underlying weaknesses in our employment picture that cannot be denied. One, we are still barely able to generate enough jobs just to match the growth in our labor force. This makes overseas employment a continuing necessity, rather than a mere option, for most of our migrant workers. Two, much of the employment available in our economy, especially in agriculture, remains too highly seasonal and informal, hence unable to gainfully employ our rural workers steadily throughout the year. We need more nonfarm job opportunities that will occupy those workers in the off seasons, such as when last April’s labor survey was taken. A key direction to me is to make agricultural processing a more widely dispersed, small- and medium-enterprise-based activity than it is now, where single large-scale processors located in market centers tend to dominate the scene. It will not only expand rural employment; it will also raise prices that farmers receive for their products, as it will no longer be set by a single large processor dictating his buying price at his whim.

Three, even as industry jobs have begun to show encouraging uptrends in recent years, signaling a nascent resurgence in manufacturing, we need to see even more vigorous and more sustained growth there. The data clearly suggest that domestic investors have become much more forthcoming with their bets on our own economy. Yet we continue to be at the tail end among our neighbors on attracting foreign direct investments. Much still needs to change in our infrastructure, our peace and order, our bureaucracy and our rules if we are to get abreast of our neighbors in investment rates, and consequently, employment rates.

Franklin D. Roosevelt once said: “Not only our future economic soundness but the very soundness of our democratic institutions depends on the determination of our government to give employment to idle men.” He didn’t mean that the government should directly create those jobs, of course. But there is certainly much that it can do to entice the job creators to step right up.

(E-mail: cielito.habito@gmail.com)

Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

  • catlover27

    7.8% growth, in spite of, not because of government. Businessmen, wary of having their pockets picked by government agencies, LGUs, and the BIR, would rather directly invest elsewhere.

  • perpetual7

    Unless we thorougly control the disproportionate growth of our population, these job creations suiting mass employment will be no better than a dog chasing its own tail. And unless these people, well-meaning or misinformed or simply bigoted, stop their opposition to the measures to control the population, this will be a futile cycle year in and year out.

    May the “self referential” clergy cut and cut clear to site which passage in the holy book states that it is ungodly to adopt family planning thru contraception. The story of Onan who incurred the wrath of God and paid for his life was not primarilly because of the act of spilling his seed on the ground but because of his selfishness to deny his dead brother the honor of having an offspring, which is part of the laws and traditions of the Jews.

    On the contrary, what will happen to the child in the womb (should there be) of an unfaithfull wife if the water of bitterness discharges the womb and drops the uterus?

    This is part of the Law of God given to Moses. Please clergy, cut and cut clear.

    • Fulpol

      accordingly, a higher level economic status of a couple, a higher tendency to plan the size of their family..

      provide decent jobs, educate the population.. in fact, birth rate is decreasing in the Philippines..

      • perpetual7

        Here’s our country’s birth rate data per population of 1000 for the last ten years started at 2003 up to 2012:

        26.3; 25.8; 25.31; 24.89; 24.48; 26.42; 26.01; 25.68; 25.34; 24.98

        If you call that decreasing and you’re a hundred years old, you look just 99 to me.

  • agaylaya

    The solution you gave is “to make agricultural processing a more widely dispersed, small- and medium-enterprise-based activity than it is now”. This strategy has been known since the 70s. The opportunities abound but the risks are also higher. Thus, the guys who eventually succeed are the giant investors like San Miquel Corporation, Robina, Bounty, and now, CP of Thailand. Projects sponsored by the government intended for small stake holders usually led by the Department of Agriculture or by the DAR are so riddled with graft and corruption none survive beyond three years or so. We do not lack ideas but this “me first, and me only” attitude is the one that killed the projects and continue to kill us.

  • bgc

    Good thing you beat Diokno (Erap’s Budget Sec) to the punch who will surely milk these numbers as if the country’s conditions are in limbo. Nevertheless, indeed, the recent Arpil LFS showed not so impressive results considering the real sector expansion, i.e. unemployment rate went up to 7.5% from 6.9% year-on-year; conversely, employment rate went down to 92.5% from 93.1% during the period. Although, you are right, the increase in unemployment (or the decline in employment) is solely confined with the Agri sector (down 5%). On the contrary employment in both the industry and services sectors rose – by 3.82% and 1.95%, respectively. Considering the labor force participation growth of 0.63%, industry and services are really doing good, i.e. unemployment numbers would have gone down if employment in agri did not drop.

    Some additional interesting numbers though: workers in the formal sector climbed to 22.875 million (60.5% of the employed) vs 22.356 million (59.1%) a year ago. On the flip side, workers in the informal sector declined to 14.945 million (39.5%) from 15.484 million (40.9%). Definitely it’s a good thing that formal sector employment is rising. But I’m not sure about the implication/s of the informal sector employment trend.

    Hope you can also write about the jobs data focusing on the informal sector. This sector is still huge – at about 39.5% of the total employment (albeit falling) and is very volatile. This might explain some of the seeming disconnections between the gdp growth and the unemployment/employment rates. The underemployment rate which is still currently at 19.2% (from 19.3% in April 2012) would also be a good addition.

  • Fulpol

    A key direction to me is to make agricultural processing a more widely dispersed, small- and medium-enterprise-based activity than it is now, where single large-scale processors located in market centers tend to dominate the scene. It will not only expand rural employment; it will also raise prices that farmers receive for their products, as it will no longer be set by a single large processor dictating his buying price at his whim.

    ———————————–

    cooperatives will counter any monopolistic tendency of business owners in rural areas.. cooperatives should tie up with agro-industrial establishments to gain market, funding and stable prices of their produce..

  • TinimbangNgunitKulang

    But how many of those who have jobs also have living wages? Employers seem to tell their workers that “me trabaho na nga kayo, gusto nyo pa ng sweldo.”

  • Eustaquio Joven

    Dispersal of industries is a step towards decongestion of Metro Manila. It will lead to lesser flooding and traffic problems. Marcos initiated moves towards this direction.

To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.

Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:

c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94

editors' picks

November 23, 2014

Five years and counting

advertisement
November 22, 2014

Climate hope

advertisement