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Mixed picture on jobs

/ 05:06 AM September 27, 2019

I’ve always found the jobs data to be more reflective of the real picture of the economy, rather than those on gross domestic product or output. After all, it’s the state of jobs, both in terms of their number and nature, that directly relates to the welfare of persons and their families, and less so the level of production in our farms and firms. I thus find it interesting and illuminating to dig deeper into the results of the quarterly Labor Force Survey taken in January, April, July and October every year. The results of the July survey were recently released, and as always, it’s a mix of things to both be pleased and feel concerned about.

The proportion of Filipino workers in the labor force unable to find work stands at 5.4 percent, the same rate one year ago. The good news is that our economy gained 2.3 million net new jobs over the past year, that is, since July 2018. This is nearly five times the 479,000 net new jobs posted last year. By comparison, about a million new 15-year-olds join the working age population every year, much of whom do not actually join the labor force yet as they would still be in school, especially now that compulsory basic education goes all the way to Grade 12. Thus, the 2.3 million net new jobs are far more than enough to offset the new entrants into the labor force, which means that enough new jobs came about for those who had previously not been working. This could have brought down the unemployment rate, or the percentage of the labor force without a job.

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But the unemployment rate actually remained at 5.4 percent, the same as last year. The explanation for this is that many people who had earlier chosen to stay out of the labor market (i.e., preferred not to work or look for work) joined it in the past year, raising the labor force participation rate to 62.1 percent, from 60.1 percent last year. Those 2 percentage points were equivalent to 1.5 million new jobseekers, adding to the new 15-year-olds who sought work, who must have numbered around 800,000, thus totaling 2.3 million, the same number of new jobs created in the economy.

What about the quality of those new jobs? The not so encouraging news is that the percentage of wage and salary-paying jobs went down again, from 65.3 to 63.4 percent, as only about one-third of the 2.3 million new jobs were of this class of worker. The bulk of these were workers for private establishments. Interestingly, wage and salary workers employed in private households (that is, domestic helpers) declined by 174,000. This seems to square with a general observation one tends to hear commonly nowadays, that it has become much harder to find househelp. If that is a sign of improving times for rural folk, then that would be good news.

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There are three other classes of workers tracked in the statistics: the individually self-employed (think balut or fishball vendors, padyak or tricycle drivers, laundrywomen, etc., hence mostly informal sector or underground economy jobs); those who employ others in a family-owned farm or business (entrepreneurs); and unpaid family workers (again likely to be in the informal sector). About a million each were added to the first and the third classes, which is not good news. On the other hand, there were 326,000 less entrepreneur-employers, which implies that there were that many small enterprises lost within the past year. This must be disappointing news especially for the Department of Trade and Industry, which fosters more negosyo along with more trabaho.

By worker occupation, the data also show that there are now 1.7 million less managers compared to last year, while there are nearly 2 million new service and sales workers and more than a million additional unskilled or low-skilled workers in elementary occupations. “Service and sales workers” would include informal sector workers like ambulant vendors, laundrywomen, drivers and other informal workers, who are probably more numerous than department store salesclerks, beauticians and other formal sector service workers.

All told, it’s a case of much more new jobs, but one wishes they were of the better kind.

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TAGS: Cielito F. Habito, economy, employment, jobs, No Free Lunch
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