Are jobs improving?
Is the jobs situation in the country getting better? Yes and no, based on latest data. The latest quarterly Labor Force Survey (LFS) yields a mix of welcome and not-so-welcome news. The October LFS data are the last in the year, and taken with the data for January, April and July, one gets a picture of the jobs and livelihoods situation for the whole year.
The following sum up key trends on the jobs front this year: (1) Overall quantity and quality of jobs has improved; (2) agriculture continued to lose hundreds of thousands of jobs (but by less than last year); and (3) underemployment has dropped significantly, but varies widely across the country’s regions.
Let’s examine the evidence.
Averaging data across four quarters, this past year has seen nearly a million net new jobs created. We had a good start, with the January survey reporting 2.4 million net new jobs, but subsequent quarters saw this rise tapering, and by October, turned into a net loss of 218,000 jobs. Thus, while the average picture for the year looks good, things actually deteriorated as the year progressed, mirroring the economy’s slowdown in output and incomes, as measured by gross domestic product.
These worsening trends must be arrested, and one hopes that with the latest reported slowdown in price increases that finally stemmed the accelerating trend since the year started, the worsening trends in jobs and incomes would soon be arrested as well.
The silver lining lies in improved quality of jobs, indicated by a growing proportion of wage and salary jobs, now accounting for nearly two-thirds of all our employed workers. Ten years ago, it was just over half. The past year saw an average of nearly a million new wage and salary workers, with a corresponding decline in unpaid family workers and those individually self-employed (mostly in the informal sector). This changing job composition is consistent with the faster growth in manufacturing and construction, where the wage and salary jobs are, whereas the agriculture sector, where much of the unpaid family workers are, has been declining.
For the longest time, agriculture has been the disappointment both on the output and jobs front. The third quarter saw a loss of 419,000 farm jobs, reflecting the output drop (-0.4 percent) in the sector as well. The average farm job losses this year has been 260,000 — at least much lower than last year’s losses of 803,000.
The sector actually posted job gains of 841,000 in January, but has since lost much more than that. The problem with agriculture jobs is that they are seasonal, and hence not permanent and full-time in nature. This sector is where most of underemployment in the economy occurs owing to such seasonality, although there’s much underemployment in services as well, particularly in informal services.
There’s good news in how these lower-quality jobs are being replaced by better-quality wage and salary jobs elsewhere. Still, there is cause for concern if it means that young workers are being drawn away from agriculture, threatening a decline in the sector. It reflects failure on government’s part to make agriculture a remunerative enterprise for small farmers — not by artificially propping up prices via trade barriers (thereby penalizing rich and poor consumers alike), but by helping farmers gain from higher productivity and greater value adding.
Dr. Mahar Mangahas of Social Weather Stations has always argued that it’s the sum of unemployment and underemployment that should be the yardstick for the economy’s performance on jobs, and is more consistent with the joblessness SWS measures. The good news is that underemployment rate was down to a remarkably low 13.3 percent in the latest October survey, perhaps a direct consequence of how only industry jobs actually increased (by 405,000), while jobs in agriculture and services declined.
But this varies widely across the country, with Metro Manila and Muslim Mindanao showing the lowest rates (4.8 and 5.7 percent, respectively), while the Ilocos and Bicol regions had the highest (22.4 and 22.2 percent, respectively). All told, we have a long way to go to keep Filipinos adequately and gainfully employed.
