Are workers better off?

Good news: The country’s unemployment rate this year so far is lower than it was a year ago. Not-so-good news: Even so, we lost hundreds of thousands of jobs over the past year. More regions actually had their unemployment rate go up than those where it went down. Also, one out of five unemployed was actually a college graduate.

Good news: The underemployment rate is significantly down from a year ago. Not-so-good news: This is probably mainly because we lost nearly 2 million jobs in agriculture, the sector with the most underemployment. But five regions saw underemployment actually go up, and quite substantially in two of them.

Good news: The overall quality of jobs has further improved in the past year. Not-so-good news: The number of small enterprises significantly went down in the same period, when we should be having much more of them if we are to have more inclusive growth.

The results of the quarterly Labor Force Survey of the Philippine Statistics Authority for January 2019 were released earlier this month, and as summed up above, it had the usual mix of good and not-so-good news. More than the data on gross domestic product (GDP) that measures aggregate output and income, the jobs data give us a clearer picture of trends in the wellbeing of Filipino families, which hinges on the quantity and quality of jobs in the economy. It is thus interesting and worthwhile to examine the numbers behind the above observations more closely.

How could the economy have unemployment rate go down (from 5.3 percent last year to 5.2 percent now) even as the number of jobs actually went down significantly (by nearly 400,000 jobs)? The answer lies in the labor force participation rate, or the percentage of working-age (15 years and up) people who are either working or actively seeking work. Those who are 15 years old and older are not part of the labor force if they are in school, or are not seeking work either because they don’t need or want to, or have given up out of frustration due to difficulty in finding one.

The data show labor force participation rate declining from 62.2 percent last year to 60.2 percent now. Is this good or bad? It’s a good thing if it means that more 15-year-olds are in school (because the K-to-12 program keeps them there rather than begin searching for jobs), or if better incomes have made it unnecessary for both spouses in a family to work. But it would be bad news if it means that more frustrated job seekers have simply stopped looking. This could more likely happen in our farm areas, considering the loss of 1.9 million jobs in agriculture. Unfortunately, the data can’t tell us which is which.

What is clear from the data is that nine out of 17 regions actually had worse unemployment, led by the Autonomous Region in Muslim Mindanao, which saw unemployment rate shoot up from 2.6 to 6.3 percent, likely traceable to the Marawi conflict. Beneficiaries of lower unemployment included Metro Manila, Ilocos, Cagayan Valley, Calabarzon, Central and Western Visayas, and Davao Region. Also disturbing is how 21 percent of the jobless were college graduates, implying a continuing jobs-skills mismatch that needs attention.

Underemployment is significantly down (from 18 to 15.6 percent), and 3.2 million workers actually shifted from part-time to full-time work (40 hours a week). But Eastern Visayas and Soccsksargen had hefty 5-percentage-point increases in underemployment, which also rose in the Cordilleras, Central Luzon and Zamboanga Peninsula.

Wage and salary workers now make up two-thirds (65.8 percent) of our workers, whereas they were less than half 15 years ago. Unpaid family workers now make up only 4.7 percent from nearly 14 percent of all workers 15 years ago, with a reduction of close to a million over the past year alone. But what bothers me is that there were 145,000 less of those who are self-employed with employees, or small business owners. Our policy and business environment that remains unfriendly to small businesses is an area where we have much more homework to do. After all, we don’t only want our people, especially the young ones, to find jobs; we also want many of them to be creating jobs.

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