Press Releases

Press statement on the May 2022 jobs reportRep. Joey Sarte Salceda

July 7th, 2022

Our jobs situation continues to show enduring weaknesses, demonstrating that economic scarring continues to affect key sectors of the economy. I am particularly concerned by the fact that the increase in the number of unemployed persons (770 thousand) exceeds the number of new members of the labor force (550 thousand).

In other words, not only were we not able to find new jobs for new workers (likely due to the end of academic requirements). We also lost some jobs that already existed in April.

This is not reassuring for equitable economic development. This means that the growth figures from last quarter (8.3%) are accruing to people who already have secure jobs; and is not creating new employment. It is also not reassuring in view of rising inflation. Conventional economics would have it that unemployment and inflation generally have an inverse relationship. We are not getting the good side of that tradeoff. This development suggests that there is an increased number of the workforce that have to bear with joblessness and higher prices.

For policymakers, the lesson I derive here is we must eventually shift our social benefits system from targeted cash transfers, to some form of universal unemployment insurance. There are workers who may not necessarily be poor yet (recently unemployed, for example), but are getting there – and our social benefits system is likely not adept enough to catch up to them.

At the same time, we must be more aggressive with job creation. Temporary cash-for-work programs will not address structural issues that hamper jobs growth.

It appears that the momentum of jobs recovery is in the services sector, with some 730 thousand jobs created. That, of course, is highly dependent on continued economic reopening. Any surprise increase in hospitalization due to COVID should be viewed as the single greatest threat to the services sector at this point. We should continue vaccinating the vulnerable, expanding healthcare capacity, and intensifying preventative services such as BHWs reminding their kabarangay about minimum health standards.

The most obvious area of jobs bleeding is agriculture and forestry, which lost about 630 thousand jobs. We employ around a quarter of our labor force in agriculture, but the sector produces just a tenth of economic output. Taken together, these mean that jobs in that sector are both very weak and very low-paying. Prevailing agricultural productivity programs such as mechanization will increase yields and perhaps even GDP contribution, but they will also mean fewer needed farmhands.

The jobs issue (what appears to me to be an extreme surplus of labor in the agriculture sector) will not just fade away. President Marcos must address this along with improving food security. It may be necessary to face up to some difficult truths, one of which is that for some farmers, the best way to improve incomes and job security is to simply move them to better and more secure jobs. As such, the Department of Agriculture must not operate in a silo of its own mandate, and must work with other government agencies to find jobs for the farmworkers that mechanization and modernization will almost inevitably displace.

Although I expect GDP growth to remain rosy towards the end of the year, I am worried about jobs availability and quality. I have proposed to PBBM and the House leadership that we once again pursue the National Broadband Network along with more available satellite internet in more isolated areas, so that Filipinos can find digital jobs from anywhere in the world. Freelancers now account for around 2.5 million jobs in the country, and I expect the figure to rise further. I suspect if we drill down, much of the newly created ‘general and administrative services’ work is actually digital freelancing.

If we are willing to invest in the infrastructure and environment necessary for this sector to grow, it could be as revolutionary and as beneficial to ordinary Filipino families as the rise of the BPO sector was some twenty years ago.

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