Monthly Archives: December 2003

Jobs crisis worsens despite strong economic growth

Despite strong economic growth, Filipino workers face poor prospects in the coming year as the current jobs crisis worsens. Yet government has turned a blind eye to the crisis in the labor market. Instead it has focused on economic growth, paid lip service to job creation, and offered lame excuses. We in the labor movement call on the government to address the worsening crisis and ease the plight of the working class.

Evidence of a worsening jobs crisis amid high growth in output is found in the latest economic data. Gross domestic product grew 5% in the third quarter of this year, exceeding government expectations and outpacing our stronger Asian neighbors. Yet joblessness rose in October, raising the unemployment rate for 2003 to 11.4 percent from 11.2 percent in 2002. Unemployment today is higher than in 1998 when the economy was in recession. Since then the ranks of the unemployed has swollen by one million to 4 million today.

But unemployment is only the tip of the iceberg. There are 12 million Filipinos looking for work. The number includes underemployed workers and those outside the labor force but who are willing to work should job prospects improve. And while the economy continues to generate jobs, most of these are marginal, low paying and temporary.

Despite the deepening crisis in the labor front, government refuses to fully acknowledge the problem. Instead it chooses to trumpet the good news of higher-than-expected GDP growth – while ignoring the intensifying jobs crisis. The success of the million jobs program launched two years ago has proved illusory. Most of the jobs created were temporary. With 12 million workers looking for work, one million jobs hardly makes a difference. In any case, it could not be sustained.

The country’s economic managers attempt to explain the problem away by saying that growth has not been strong enough to lower unemployment. They also point to political instability scaring away foreign investors. While there is a germ of truth to these explanations, they do not go to the roots of the current labor crisis. And the roots of the crisis lie in the failed development strategy that the government has pursued in the last 20 years with increasing zeal, if with diminishing returns

True, growth is not strong enough to quickly lower unemployment. But it is also true that the economy has become less efficient in generating employment. Liberalization has made the economy produce less and import more, making it more difficult for output growth to translate into job growth. True, political instability explains a large part of the drastic drop in FDI. But the decline took place in the context of a global slowdown in FDI flows to developing countries since 1999. Not to mention that the Philippines has failed to attract FDI even at the height of global flows. This shows the folly of relying on FDI to revive job creation.

More than ever, it is time to overhaul the country’s failed development strategy. What is needed is a strategy to develop domestic productive capacity, expand the domestic market, nurture dynamic, globally competitive industries, and support local entrepreneurs. Central to such a strategy is the creation of quality employment for the growing labor force, and rising – not falling –wages. After all, providing adequate employment opportunities and improving living standards should be the goals of development.