Almost three million drop in employed sign of swelling ranks of discouraged workers—IBON

September 8, 2023

by IBON Foundation

Research group IBON said that the 2.8-million collapse in the number of employed persons but small decline in unemployed confirms that many Filipinos have dropped out of the labor force. This is due to the lack of jobs – even work that is self-employed and informal. The group said that this huge increase in discouraged workers indicates the economy’s inability to create sustainable jobs.  

Looking at July year-on-year data, the number of employed persons fell from 47.4 million to 44.6 million. The number of unemployed only dropped by 329,000 while the number of underemployed only grew by 562,000. IBON said that these unemployment and underemployment figures indicate that the losses in employment did not translate into Filipinos becoming unemployed or underemployed but leaving the labor force altogether due to dismal job prospects.

The group noted by hours worked that the number of part-time workers or those working less than 40 hours per week fell by an overwhelming 3.6 million from 16.1 million in July 2022 to 12.5 million in July 2023. The 1.1-million increase in the number of full-time workers or those working more than 40 hours did little to offset this. This, combined with the lack of job creation or big decline in the number of employed in July 2023 shows that part-time workers did not necessarily move on to better and more secure jobs.

By class of worker, IBON noted that the number of wage and salary workers only increased by 552,000 mainly in private establishments. The 831,000 increase in private wage and salary workers was offset by the decline in government workers (by 228,000), private household workers (by 36,000), and those that worked with pay in own-family operated farm or business (by 16,000).

But there was a significant decline in self-employed persons by 1.8 million from 13 million in July last year to 11.2 million in July 2023. Unpaid family workers (those working in own-family operated farms and businesses) also registered a big drop of 1.7 million from 3.7 million to almost 2 million. The group said that Philippine employment is dominated by informal work such as the above-mentioned, including domestic workers, and such temporary, irregular and insecure jobs are being lost.

The group said that the trend of informal work being lost may be observed in the big decreases in wholesale and retail trade and agriculture and forestry where there is prevalence of informal work. In July year-on-year, jobs in the agriculture and forestry subsector dropped by a huge 1.6 million from 9.7 million to 8.1 million. Employment in wholesale and retail trade fell by nearly 2 million from 10.6 million to 8.7 million. These drops are too large to be simply attributed to weather disturbances or volatile markets, IBON said, rather are indications of more fundamental problems on the economy’s capacity in creating permanent and sustainable jobs.

IBON stressed that the decrease in the number of informal workers is clearly not an indication of an improving labor market because of the huge drop in employment numbers in general. Instead, it reveals that an increasing number of discouraged workers are dropping out of the labor force due to the inability of the economy to create meaningful jobs.