The second half of his reforms

President Aquino wants to be a reformist president, and he’s doing a good job at reforming society. His “daang matuwid” resonates with the people, and is something they want: a clean, honest government that cares. But they also want a decent life, and that he hasn’t yet provided.

They want the dignity of jobs, of earning their own money and not begging for demeaning doles (the Conditional Cash Transfer program is a successful interim solution, not a final one). They want jobs, and they have a right to those jobs. Some 2.9 million Filipinos are without a job or with a totally inadequate one, says the government—and that’s a grossly understated figure. SWS puts it at a more believable 11 million. Drive around the countryside and see which figure you believe. Then add to that most of the 10 million overseas Filipino workers who would rather be home, if there were decent jobs to be had.

Actually, the figure doesn’t matter, and it’s senseless to argue. It’s like the figures on poverty. Whatever they are, they’re unacceptably high.

So in the second half of his term the President needs to introduce the second half of his reforms: creating jobs—job growth of GDP, not the jobless growth of GDP today. He has addressed the ballooning population with his RH Law (I hope to God the Supreme Court rules wisely), but has made negligible progress in providing jobs to Filipinos. In his second half he must focus on job creation. This means radical—and it must be radical—reform. Tough, unpopular, but correct decisions a hugely popular President can do with a supportive Congress, which it will be.

The Economist, whose intellectual honesty I can’t question, identified the problem, and I quote (with acknowledgment, Sotto, please note):

“Throughout the recession companies have continued to complain that they cannot find young people with the right skills. This underlines the importance of two other solutions: reforming [labor] markets and improving education.”

“Youth unemployment is often at its worst in countries with rigid [labor] markets. [Cartelized] industries, high taxes on hiring, strict rules about firing, high minimum wages: [A]ll these help condemn young people to the street corner.” (Sounds like us, doesn’t it?)

“Many countries in the arc of youth unemployment have high minimum wages and heavy taxes on [labor].”

What is needed is “to reform [labor]-hungry bits of the economy—for example, by making it easier for small businesses to get [licenses], or construction companies to get approval for projects.”

“Across the [Organization for Economic Cooperation and Development], people who left school at the earliest opportunity are twice as likely to be unemployed as university graduates.”

But “what matters is not just the number of years of education people get, but its content. This means expanding the study of science and technology and closing the gap between the world of education and the world of work—for example by upgrading vocational and technical education and by forging closer relations between companies and schools.”

When I went to university, I did as a trainee. I worked in an electronics company by (shortened) day, and studied by night. My learned skills matched the job I was to do. Closer interaction between business and academe is necessary, with government as the intermediary. According to the Economist, “governments are trying to address the mismatch between education and the [labor] market. Companies are beginning to take more responsibility for investing in the young. And technology is helping [democratize] education and training. The world has a real chance of introducing an education-and-training revolution worthy of the scale of the problem.” Well, so does the Philippines, if the President accepts the challenge.

He needs now to focus on what business wants, and provide it, but this he is not doing at anything near the reformist level necessary to put 11 million Filipinos to work.

As I said 10 columns ago, everything centers around jobs. It will be much harder to attract youth into the New People’s Army if they have jobs. But we need a hell of a lot more efficient, and simpler, government if we are to create those jobs, and a much more flexible job market! It’s well-known what has to be done, just do it. Loosen up the labor laws, and make starting and running a business extremely simple, match education to job need, build infrastructure, and watch the job market blossom.

Just an aside for Atlas Carandang who reacted to my last column and said the link of foreign direct investments to wages was too simplistic. For him, and all of you, I am limited to around 950 words per column. I can’t do a full dissertation with that. I am well aware, Atlas, of all the other factors involved, have argued incessantly on them, and have written on them for my clients, government, and others. In columns over time, too. I admit to many faults, but lack of intellectual discernment is not one of them.

I’m going to devote a little column space every now and then to praising, or criticizing, corporate actions I experience. We happily talk of policies and plans and grand visions, but too rarely get down to where it matters: our daily lives. Let’s expose some examples to hopefully achieve a better day-to-day environment.

So here’s one. Puregold was selling Fundador for P498 per bottle. Beside it was the same bottle but with a “free” item for P524. My limited memory of math says that doesn’t compute as 524 minus 497 doesn’t equal “free.” So I pointed it out to Nina, the store manager. Next morning, Amy from their main office called to say it was an oversight that had been corrected, and wouldn’t happen again.

That’s how companies—and countries, I might add—should be run. Accept there’s a problem, and act on it.