ACCORDING to the latest Labor Force Survey, which dates back to October 2014, unemployment rate improved to 6 percent compared to 7 percent of October 2013 and this 6 percent is the lowest unemployment rate in more than 10 years.
The underemployment rate is also down to about 18.5 percent compared to 19 percent of October 2013. But 6 percent of what or 18.5 percent of what? This article answers these questions by profiling the population in terms of work.
The population of the Philippines is close to 99.5 million. Of the 99.5 million, roughly 37.3 million are under 15 years old. By international labor standards they could not be part of the labor force. This leaves about 62.2 million potential workers. However, not all of 62.2 million participate in the Philippine labor market. Some do not participate for good reasons. For example, full time high school and college students do not work to focus on their studies. Some do not participate for not so good reasons. For example, there are many who had looked for work in the past, and despite all the efforts and patience had not been employed. They become frustrated and have stopped seeking for jobs.
Still, there are many who have depended on allowances, food and or shelter from some family members. “Why work in some substandard environment with substandard wage when one can live off of family’s accommodation?” This is even if many jobs like flipping burgers are “substandard” for some but honest and decent living for others.
Some go abroad and become Overseas Filipino Workers (OFWs). As they are not in the country and do not look for jobs in the country, they are at the moment not participants in the Philippine labor market. The number of people of at least 15 years old and do not participate in the labor market is 22.2 million.
This leaves the Philippine labor market with 40 million participants. Forty million of 62.2 million is 64.3 percent and this 64.3 percent is what government publishes and defines as the labor force participation rate (LFPR).
Unfortunately, not all 40 million have jobs at all times. For example, many fresh graduates do not get jobs immediately. So in the time frame they are looking for jobs, they are classified as unemployed.
Others could be in transition from one work to the other. They resign to look for another job. And so between the time they resigned to the time they are hired, they are classified as unemployed.
Others are laid off and are looking for jobs and so between the time of the lay off and the time they are hired, they are classified as unemployed.
There are 2.4 million unemployed workers. Hence, 2.4 million of 40 million is six percent and this 6 percent is what government publishes and defines as the unemployment rate.
This leaves the Philippine labor market with 37.6 employed people.
Unfortunately, not all employed people are employed in the ideal sense and are rather better classified as underemployed. There are people with work but would like to work more because their pay does not suffice to support for the basic needs of oneself and family.
For example, a part time fast food custodian who works four hours a week is employed. But four hours a week will unlikely pay an amount enough to live independently. There are others who work long hours but still do not get paid enough to pay for the basic needs of oneself and family.
For example, many vendors selling peanuts in public buses work the whole day. Because many of them do not sell enough to make money enough to support oneself, they are underemployed. The number of unemployed basically tells us the lack of quality that the labor market creates. There are 7 million underemployed workers. Seven million of 37.6 is roughly 18.5 percent and this 18.5 percent is what government publishes and defines as the underemployment rate.
This leaves the Philippine labor market with 30.7 “fully” employed people. One might say that there are 30.7 million people working to support a population of 99.5 million and each employed person has three and one-third mouths to feed.
Fortunately, the OFWs have not been counted yet. Of the 22.2 million people of at least 15 years old and do not participate in the labor market, 10 million are OFWs. So alternatively, one might say there are 40.7 million people working to support a population of 99.5 million and each working person has one and two-thirds mouths to feed.
First, the saying assumes that all OFWs make a decent pay. Second, the numbers do not account for the condition where they work. Third, the social loss of being away from the family and children being left behind is also not accounted for.
The 6 percent unemployment rate and 18.5 percent underemployment rate are good numbers in comparison to the last 10 years, but there is much to be done to improve these numbers.