Independence from GNP

I believe in rating economic progress by listening to what the people as a whole say about their own progress, rather than by listening to the international banks, big business, politicians, the diplomatic corps, and all others who point to how the aggregate value of production is growing.

Counting the number of people who have gotten better off, and comparing it with the number who have gotten worse off, is the oldest survey question in the book. It has now been surveyed 152 times at the national level: annually in 1983-85, semi-annually in 1986-91, and then quarterly since 1992. The finding of more losers than gainers in 126 of those 152 surveys—despite persistent growth in real gross national product per person, coupled with stagnation of real wages—is the clearest proof of the failure of trickle-down economics in the last four decades.

The good news is that in 26 surveys, happily including the two latest of December 2023 and March 2024, gainers were dominant (“First Quarter 2024 Social Weather Survey: Gainers minus Losers stays at +5 from December 2023 to March 2024,” www.sws.org.ph, 6/14/24, with subtitle: “30% got better off, 25% got worse off, and 45% stayed the same in the past 12 months”).In the long stretch of 1983-2014, losers almost always exceeded gainers—the two exceptions were in May 1986 and March 1987, when Net Gainers were +2 and +11 respectively. For three decades, the Net Gainers time-chart looked like the path of a submarine, submerging to as low as minus-50 (“catastrophic”) in June 2008.

But the deficit narrowed to single-digits in 2010-14—was it because the conditional cash transfer program got started in 2008 (on paper, anyway), and consumer price inflation was cooling? Good times came when gainers became dominant for the long five-year stretch of 2015-19 (with one exception, 2018Q3). Would this be the new normal from then on?

Then disaster struck in the pandemic, with Net Gainers collapsing to the minus-70s (“catastrophic”) in 2020 and averaging minus-32 (“very low”) in 2021. Thankfully, in 2022, it recovered to single-digit negative (“fair), and closed at +8 (“high”) in 2022Q4. In 2023 the score reached its all-time high of +11 in June, but stalled at minus-2 (“fair”) in September (“Throwback to loser-dominance,” 12/2/23). Let us hope the recent winning streak of two quarters will last longer.

We are not out of the woods. In the first place, the dominance of gainers is geographically limited. The gainers’ lead in the National Capital Region (+9) and, most of all, in Balance Luzon (+14) presently offsets the losers’ deficits in Visayas (minus-2) and Mindanao (minus-8). Mindanao has had a three-quarter streak of loser dominance. The top scorers are usually NCR and Balance Luzon.In the second place, the capacity to participate in gaining is skewed by the great imbalance in access to schooling. The latest Net Gainers scores are +10 for college graduates, +12 for junior high school (JHS) graduates, minus-4 for elementary graduates, and minus-1 for elementary dropouts. Most of the time, college grads have the top score, and elementary dropouts have the bottom score; these are tabulated in the Social Weather Stations media releases about gainers and losers. Although the pattern is not smooth for the upper two and the lower two categories, it is clear that graduating from JHS is a key hurdle to clear before the majority of Filipinos can share in the benefits of economic growth. The lesson here is that investment in infrastructure should also include human infrastructure.

Roughly speaking, for every 10 adults at present, one is an elementary dropout, three are JHS dropouts, three are JHS grads, two are senior high school (SHS) grads or equivalent, and only one is a college grad. How can a JHS dropout hope for a decent wage in a modern economy? No wonder the self-rated poor are over 40 percent of all families. I think we should target having zero elementary dropouts, at most one JHS dropout, three JHS grads, four SHS grads, and two college grads for every 10 adults, within 10 years.

Thirdly, economic deprivation prevents the neediest from sharing in progress. In March 2024, the Net Gainers score of families rating themselves Poor was minus-6, versus +11 for families at the Borderline, and +21 for families Not Poor. The Net Gainers score was minus-15 for families suffering severe hunger, versus minus-2 for those in moderate hunger, and +7 for those never hungry.

Fostering general economic growth does not automatically help the hungry, the poor, and the unschooled. Public programs that target the needy will enable them to help themselves and society in general.

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Contact: mahar.mangahas@sws.org.ph.