Most new jobs temporary, poor quality — IBON

December 6, 2019

by IBON Foundation

Research group IBON said the recently reported large increase in employment and slight decrease in unemployment bring much-needed relief to millions of Filipinos who have been suffering worsening unemployment since the Duterte administration began. The group however also warned against complacency. Looking at the official labor force survey results more completely shows that the majority of jobs created were temporary and poor-quality.

The Philippine Statistics Authority (PSA) reported that in October 2019 the employment rate grew to 95.5%, while the unemployment rate was lower at 4.5 percent. The number of employed Filipinos rose by 1.8 million to 43.1 million and the number of unemployed declined by 153,000 to 2 million.

According to IBON estimates correcting for government underestimation, however, the number of unemployed was actually 4.1 million in October 2019. This is over double the officially reported 2 million unemployed. Official unemployment figures do not reflect discouraged workers who stopped looking for work in the past six months or those unable to immediately take up work, instead considering them as ‘not in the labor force’.

The economy’s productive sectors continue to weaken, said the group. IBON noted that while employment in agriculture in October 2019 increased, the sector is on a general trend of decline due to government neglect and anti-farmer policies. The number of employed in agriculture fell from 11.8 million in October 2016 to 10.4 million in October 2017 and 10 million in October 2018. This slightly bounced up to 10.1 million in October 2019 but not enough to recover the significant agricultural job losses since the start of the Duterte administration.

IBON said, in particular, the agriculture, hunting and forestry subsector lost 49,000 jobs falling to 8.8 million in October 2019 from 8.85 million in October last year. This likely includes rice farmers displaced by the recently passed Rice Liberalization Law. This was only offset by a 214,000 surge in fisheries employment, to 1.31 million.

The manufacturing sector also continues to weaken, said the group, with the number of employed in the sector decreasing by 56,000 to 3.61 million in October 2019 from 3.7 million in October 2018. Agriculture and manufacturing are the most important sectors for job generation, increasing incomes, and economic development so this weakening should be cause for concern.

IBON said that the main sources of additional jobs were in in sectors where employment is temporary and poor quality or jobs that are low-paying, uncertain and informal. Those employed in wholesale and retail trade increased by 563,000 to 8.56 million, in transportation and storage by 336,000 to 3.50 million, and in construction by 308,000 to 4.22 million. These three sectors accounted for some two-thirds of net employment generation.

The wholesale and retail trade sector in particular is notorious for low-earning and insecure work, the group said. The trade subsector has the lowest average daily basic pay among all subsectors outside agriculture. As of the latest available data from 2018, wage and salary workers in the trade subsector were paid just Php358 compared to the Php404 average in industry and Php483 average across all services. Contractual low-paid work is also the norm in the construction sector.

The concern about poor quality work is confirmed by how 1.34 million of the 1.82 million additional employment, or an overwhelming three-out-of-four new jobs, was in part-time work of less than 40 hours per week, said IBON. The mean hours worked per week correspondingly fell from 42.8 hours in October 2018 to 41.8 hours in October 2019.

The number of those who worked without pay also continued to increase by 187,000 to reach 2.53 million in October 2019, the group noted. IBON said that the government should be careful in hailing ‘record low unemployment’ if the quality of work is still so uncertain, irregular and low-paying. The immediate relief of at least some work for so many now should not distract the government from taking real steps to develop domestic agriculture and Filipino industry. These are needed for millions of Filipinos to enjoy stable, regular and higher-paying jobs and be lifted from poverty, the group said. ###