Most jobs being created in the lowest paying sectors – IBON

August 9, 2023

by IBON Foundation

NEWS ANALYSIS – The latest June 2023 labor force figures confirm that the economy is still struggling to create decent work, pay and earnings, said research group IBON. This is particularly clear if the results are interpreted against recent surveys which showed increases in self-rated poverty and decreases in household savings over the same period covered by the Labor Force Survey (LFS).

The June 2023 LFS reports 2.25 million more employed from a year ago and 581,000 more from the previous month. IBON noted however that the biggest increases in employment came from the subsectors with the lowest reported pay. The top four (4) job-creating subsectors are all among the five (5) lowest-paying subsectors in the economy – 612,000 increase in accommodation and food service activities (average daily basic pay or ADBP of Php432 in 2022); 457,000 increase in agriculture and forestry (Php300); 358,000 increase in wholesale and retail trade (Php419); and 268,000 increase in other service activities (Php304).

The group said that the hollowness of the so-called job creation is confirmed by how the number of poor and borderline poor families increased by 1.5 million between June 2022 and June 2023 to reach 21.6 million, as reported by the Social Weather Station. Also, the number of households without savings increased by almost 100,000 between the second quarter of 2022 and the second quarter of 2023 to 18.8 million, as reported by the Bangko Sentral ng Pilipinas.

These trends indicate how conventional analysis of LFS figures may no longer be appropriate, said IBON. For instance, the number of full-time workers reportedly grew by 1.2 million (to 31.7 million) and of wage and salary workers by 1 million (to over 30 million) from last year — yet poverty increased and household savings decreased over that same period. 

In any case, IBON estimates that self-employment and open informality also grew substantially by 1.3 million to reach over 21 million by June 2023 from the year before; a large 865,000 of this increase was even in unpaid family workers which bloated to 4.6 million. Wage and salary workers in private establishments and government increased by 958,000 to reach 27.8 million in June 2023. Yet while public sector workers have made gains in demanding more decent pay, wages in private establishments chronically lag behind inflation and have been declining in real terms for years.