A wage subsidy for micro, small, and medium enterprises (MSMEs) and cash aid for the youth are now in the works as part of the government’s attempts to minimize the impact of the pandemic on the country’s labor force, the Department of Labor and Employment (DOLE) said.
In an online press briefing on Friday, Labor Assistant Secretary Dominique R. Tutay both measures will be included in the National Employment Recovery Strategy (NERS) for the novel coronavirus disease (Covid-19), which is currently being drafted.
Necessary funding
The wage subsidy was initially announced by DOLE last May to be part of the implementation of the Bayanihan to Heal as One Law, but was shelved due to lack of needed funding.
Tutay said they hope the said program will finally get the needed budget from Congress through the 2021 General Appropriations Act.
“We did get some initial feedbacks [from Congress] that there additional funds for DOLE for this purpose, but we don’t know how much,” Tutay said.
DOLE requested for a P40-billion budget for the program, which will be use to pay for 25 percent to 50 percent of the salaries of qualified establishments for three to six months.
She explained the initiative aims to help struggling MSMEs, particularly those which temporarily ceased their operations during the pandemic, to retain their employees.
Likewise, she said the NERS will also have a component for providing cash aid and skills training to the youth, whom she said are considered a vulnerable sector during the pandemic, since they are among the least likely to secure a job during the crisis.
Long term solution
Tutay said the NERS aims to expand the existing Trabaho, Negosyo, and Kabuhayan (Jobs, Business, and Livelihood) of DOLE and the Department of Trade and Industry (DTI) to provide long-term assistance for Covid-affected workers.
She said it will focus on restoring the confidence of businesses to resume operations by providing them with needed support; providing uscaling and reskilling displaced workers; intensifying the implementation of occupational safety and health standards (OSHS); and boosting information and communication infrastructures.
“We have already consulted a number of national government agencies on the different programs and projects that will fall in each of the strategies I have mentioned,” Tutay said. “So by Jan. [2021], we can submit the initial report to the [Labor] Secretary.”
NERS was DOLE’s response to criticisms that is current cash aid and emergency employment program during the pandemic will only provide temporary relief for displaced employees.
New normal
Tutay noted the country is unlikely to restore the country’s labor force to its “pre-Covid levels.”
To prove her point, she cited the country’s unemployment rate was at 5.3 percent. Now, she said the country’s unemployment rate will be at 10.2 to 10.3 percent for the whole year.
“When we started with this Covid-19 pandemic. Now we see the recovery will not just be in a year or two,” Tutay said.
She attributed it to several factors including the hastened arrival of the so-called 4th industrial revolution, wherein many sectors become reliant on information and technology as well as digitalization of their processes.
“This means we will need to transition our workers from one skill to another because one our economy reopen, our workers will now be facing new forms of work and role in our economy,” Tutay said. a labor market.
During the country recovery phase, she they are anticipating unemployment rate and underemployment rate will remain high compared to that prior to the pandemic.
Image credits: AP/Aaron Favila