Business World 10 August 2015


Professor Noel de Dios, my colleague at the UP School of Economics, correctly pointed out some errors in the July 8th 2015 article, “We’re losing the war against unemployment.” I have no excuse for the obvious misreading of some labor numbers.

However, my commentaries are intact.

 I said: “After five years in office the Aquino administration continues to fail in its war against unemployment, and consequently its war against poverty. There is virtually no change in the number of workers who are either totally idle or unemployed — and this despite the relatively strong economic growth.”I have reproduced below the relevant official labor statistics as provided by the Philippine Statistical Authority.The total number of unemployed workers dropped by 178,000 — from 2,859,000 in 2010 to 2,681,000 in April 2015.But the number of underemployed workers increased by 221,000 — from 6,762,000 in 2010 to 6,983,000 in April 2015.The quality of jobs deteriorated too.One of the indicators of the quality of jobs is the number of unpaid family workers, who are considered employed under the ‘one-hour-last week’ employment concept.Employed but unpaid?This category of workers is large and increasing.The number of unpaid family workers rose by 202,000 — from 4,145,000 in 2010 to 4,347,000 in April 2015. (See Table.)
 Labor stats
With relatively strong economic growth in recent years after a slowdown in 2011, one would expect that the jobs market would be healthier. That it continues to hobble was a major disappointment. But that’s not all.

The true labor picture would have been grimmer if the joblessness situation in Western Visayas, specifically Leyte, were not excluded in the 2014 and 2015 numbers.

As most careful observers of labor statistics know the 2013, 2014 and 2015 labor numbers are not, strictly speaking, comparable to the numbers in earlier years.

On Noel’s final note, I still believe that the joblessness picture would be worse if the OFWs were to return in one big wave.

It is reasonable to assume that a mass exodus of overseas Filipino workers back home would jolt the domestic labor market.

It is reasonable to assume that not all OFWs would find better if not equally decent jobs at home when they return without displacing employed Filipinos.

In the extreme case that all returning OFWs are able to find equally decent jobs at home without crowding out those who are presently employed, it is reasonable to assume that it would depress wages.

Put simply, higher labor supply, combined with relatively unchanged labor demand, would definitely lead to lower wages.