Gov’t labor market, quality work hype disconnected from poor Filipinos’ reality — IBON

July 10, 2024

by IBON Foundation

The persistent lack of decent work, low wages, and worsening poverty contradict the Marcos administration’s claims that the labor market is on a positive momentum and that more quality jobs are being created.

Official year-on-year labor force data for May 2024 appears to indicate an improving jobs situation: the number of employed increased by 605,000 to 48.9 million from 48.3 million in May 2023. While the number of unemployed fell by a mere 61,000 to 2.1 million from 2.2 million, those that were underemployed dropped by 846,000 to 4.8 million from 5.7 million.

At face-value, it would also appear as if the quality of jobs is improving. By class of worker, wage and salary workers increased by over 1.5 million to 30.8 million in May 2024 from 29.3 million in May 2023, mainly due to a 1.3 million increase in private establishment workers. By hours worked, part-time workers declined by 1.7 million to 15.4 million from 17.1 million, while full-time workers increased by a big 2.8 million to 33.2 million from 30.4 million. Those with a job, not at work also went down by 443,000 from 737,000 to 294,000.

These official figures however fail to show the reality of millions of Filipinos who are scraping by on whatever work they can find and struggling with meager incomes and increasing poverty. They are clearly not benefitting from the claimed gains in employment and job quality.

Underemployment has traditionally been used as an indirect indicator of the quality of work. But these days, any decline may just mean that Filipinos have stopped looking for additional employment rather than that they are already earning enough from the work they have.

Also, because wages remain low, many Filipino families find it difficult to cope with the rising cost of living. Across all regions, the average daily nominal minimum wage of Php442 is just one-third (37%) of the Php1,210 family living wage (FLW) for a family of five as of June 2024.

The lack of decent work and livelihoods are also pushing more Filipinos into hunger and poverty. According to the Social Weather Stations (SWS), Filipino families experiencing involuntary hunger rose to 14.2% in March 2024 from 12.6% in December 2023, while 76% or some 21.3 million families rated themselves as poor (46%) and as borderline poor (30%) in March 2024.

Job informality also remains widespread. IBON estimates that there are 20.4 million outright informal workers which is 41.7 % of total employed persons as of May 2024. This is made up of 2.2 million domestic workers, 13.7 million self-employed and 4.6 million working in family-owned farms and businesses (including 3.6 million unpaid family workers). The number of informal workers could be much higher if the millions of irregular workers in private establishments are included.

Looking at employment by industry, the subsector with the most jobs created is among those with the worst pay. The number of employed persons in construction grew by a huge 745,000 to 5.1 million in May 2024 from 4.3 million in the same period last year. But construction work is the third worst paying subsector with Php540 average daily basic pay – only higher than “other service activities” (Php351) and agriculture (Php344).

Huge job losses in agriculture for the past five consecutive months also should not be dismissed. This underscores the volatility and insecurity of employment in the sector due to its backwardness and vulnerability to weather conditions like El Niño and Typhoon Aghon. The number of employed persons in agriculture has fallen substantially year-on-year by 697,000 in January, by 1.3 million in both February and March, by 748,000 in April, and currently by 1.6 million to 10.2 million in May 2024 from 11.7 million in May 2023. This translates to a 1.1 million average monthly contraction of agricultural jobs from January to May 2024.

The Marcos administration’s hype of positive labor market momentum and creation of more quality jobs is a far cry from the actual reality of millions of Filipinos. To really address the lack of decent work and incomes, the government should support demands for a substantial across the board wage hike, subsidies for the poor and vulnerable and support for small businesses and producers.