Worsening joblessness and informal work can be fixed with immediate ayuda, stimulus

September 30, 2021

by IBON Foundation

Research group IBON said that the latest labor force data of high unemployment and increasing informal workers should be a wake-up call for government to immediately undertake stimulus measures. The group said that the Duterte administration made the country’s poor jobs situation even worse with its repeated harsh lockdowns and inept COVID response. Giving substantial ayuda and support to distressed firms are urgent to address the jobs crisis. The government should also ensure bigger COVID response in the 2022 budget to fix lingering high joblessness and underemployment.

IBON said that the Duterte administration has no reason to celebrate seemingly high employment which is hugely bloated by poor quality work. It should instead be concerned that unemployment and underemployment are so far above pre-pandemic levels.

Comparing August 2021 to January 2020 or before the pandemic hit, employment grew by 1.7 million to 44.2 million, but unemployment also increased by 1.5 million to a high 3.9 million. Underemployment increased by 183,000 to 6.5 million, but this is likely very much underestimated from how people have stopped looking for work amid difficult labor market conditions.

Employment is disproportionately made up of Filipinos making a living through informal or irregular work. IBON estimates that over 19 million jobs, or more than four in ten jobs, are now informal work including self-employment, small family farms or businesses, domestic help, or unpaid family workers. This does not yet even include irregular workers in private establishments.

Looking at employment by hours worked, those working part-time or less than 40 hours a week spiked by a huge 2.7 million to 16.1 million in August 2021 from 13.4 million in January 2020. Full-time workers or those working 40 hours and over dropped by 1.1 million to 27.7 million. Those with a job, not at work increased by 64,000 to 396,000.

By class of worker, the group noted that the number of self-employed without any paid employees increased by 1.5 million to 12.7 million from 11.1 million in the same period. The number of unpaid family workers was higher by 644,000 at 3.3 million compared to the pre-pandemic 2.6 million. Employers in own family-operated farm or business also slightly increased by 25,000 to a little over 1 million.

Meanwhile, over 18 months of lockdowns has shed regular and establishment-based work – nearly 600,000 jobs have been lost in private establishments since the pandemic started.

An increasing number of Filipinos are also pushed into sectors where work is usually temporary and low paying, said IBON. There were job increases in wholesale and retail trade (by 914,000 to 9.5 million) and construction (by 355,000 to 4.4 million). Employment in agriculture went up by 1.5 million to 11.1 million, which can only be surmised to be yielding low income as the sector continues to contract.

IBON said that the already precarious jobs situation will worsen if the administration keeps up its poor Covid response, destructive lockdowns, and stinginess in giving ayuda and support to distressed firms. The damage can be mitigated if government takes immediate and effective action. It can protect jobs by ensuring proper containment of the pandemic instead of endless and irrational lockdowns.

To restore lost jobs and diminished livelihoods, the Duterte administration can give substantial ayuda and small business and production support through the immediate passage of a pandemic stimulus package, such as IBON’s proposal, the Makabayan Bloc’s SHIELD+ Bill, or a less conservative version of the Bayanihan 3 Bill.  This will spur domestic demand and give community entrepreneurs and small enterprises a reason to stay in business. Meaningful ayuda and ample support for micro, medium and small enterprises (MSMEs) will create a virtuous cycle of demand, growth and investment.

IBON also said that prolonged high unemployment and underemployment should compel government to spend much more on COVID response, including in the proposed 2022 national budget.