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Joblessness: The realistic picture

/ 01:24 AM November 14, 2015

A realistic picture requires realistic definitions. In the Social Weather Surveys, respondents who answer “may trabaho” at the time they are interviewed are considered as having a Job. Those who answer “walang trabaho” are then asked if they are looking for work, and are considered Jobless if they say they are.

I purposely capitalize the first letter of the words “Job” and “Jobless” to emphasize that these are SWS terms that correspond to the words “trabaho” and “walang trabaho” as commonly understood.

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On the other hand, in the official Labor Force Surveys (LFS), respondents are asked how much time they worked for pay in the past week; then those who worked as little as one hour are considered Employed. Those who worked less than an hour are then asked if they are looking for work, in which case they are considered Unemployed.

I purposely capitalize the first letter of “Employed” and “Unemployed” to emphasize that these are official terms that define a mere one hour a week as being employed.

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Thus, the SWS surveys refer to whether a person has “trabaho,” a Job, at present, and, if not, whether the person is looking for “trabaho.” Whether the person actively worked in the past week is irrelevant if at present he/she has no “trabaho.”

As defined by SWS, the latest Joblessness rate is 23.7 percent (for September 2015, reported last Monday), i.e., those having “trabaho” are only 76.3 percent of the labor force. About one-fourth of the labor force are looking for work; this is a realistic picture. The Joblessness problem is truly immense—twice as serious for women (34 percent) than men (16 percent), and twice as serious among the youth (51 percent for those 18-24 years old).

The LFS statistics, on the other hand, refer to whether a person worked in the past week, and, if not, whether the person is looking for work. Whether the person has no “trabaho” at present is officially irrelevant if he/she worked for at least one hour last week. In the latest official statistics, for July 2015, the labor force consists of 93.5 percent Employed and only 6.5 percent Unemployed.

The evidence that the official Unemployment picture is unrealistic comes from the LFS data on the Underemployed. The Underemployed are persons Employed but nevertheless looking for work. In July 2015, Underemployment was 21.0 percent of the Employed, equivalent to 19.6 percent of the labor force (0.935 x 0.210 = 0.196), or triple the size of simple Unemployment.

The sum of Underemployment and Unemployment, as of July 2015, is 26.1 percent of the labor force (0.196 + 0.65 = 0.261). In other words, about one-fourth of the labor force is looking for work. This is a realistic picture, consistent with the SWS picture. The sum is easy to derive from the official data, but is not publicized, compared to the simple Unemployment rate, which is so tiny that it tends to conceal the true scale of the problem.

Describing the trend correctly requires use of the full history. The term “trend” refers to the pattern of change, if any, over the passage of time. The length of time describing a trend is crucial. A simple declaration that “Joblessness is worsening” is misleading if based only on two or three surveys.

In 2015, the SWS Joblessness percentages of 19.1 in March, 23.2 in June, and 23.7 in September showed two successive increases. The change from June to September was insignificant. The three quarterly percentages so far in 2015, averaging 22.0, were all below the quarterly rates in 2014, averaging 25.4. Thus, Joblessness has been milder in 2015 compared to last year.

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The 2015 Joblessness average of 22.0 is also below the averages of the previous nine years, which were (in parentheses; see the table posted on the SWS website): 2013 (25.2), 2012 (28.8), 2011 (23.6), 2010 (22.5), 2009 (29.1, the all-time high), 2008 (28.6), 2007 (25.2), 2006 (26.4), and 2005 (22.6). Thus, the Joblessness

average of 2015 is actually a recovery, rather than a worsening, compared to a decade ago.

Only in 2004 and earlier years were the Joblessness averages below the current 2015 average. The SWS Joblessness surveys started in the second half of 1993, and have continued to the present, without any change in methodology. The initial quarterly Joblessness rates were 14.6 percent in September 1993 and 12.7 percent in December 1993. From 1994 to 2003, the annual average Joblessness ranged between 8.0 and 10.9 percent of the labor force. Then there was a quantum leap to 15.8 percent in 2004. Ever since 2005, however, the average has been well over 20 percent.

Thus, the big questions for social and economic historians to tackle are, in my view: Why did Joblessness rise so much from the decade of 1994-2004 to the decade of 2005-2014? Is the relatively low Joblessness of 2015 a sign of a possible return to the less stressful time of 1994-2004?

In studying Joblessness, analysts should use all data available in survey profiles. The number searching for a first job—4 percentage points of the Jobless in September 2015—is surely due to population growth. Jobs involuntarily lost—contract expirations, layoffs, and employer shutdowns, a total of 12 points—may be related to the vigor and structure of economic activity. The resignations by those who already held jobs—about 8 points—could be due to wages expected versus wages provided. Reasons behind new survey figures are always complex; they cannot be supplied by instant research.

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Contact mahar.mangahas@sws.org.ph.

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TAGS: Social Weather Surveys, Unemployment
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