About a month ago, my good friend Mr. Salvador “Buddy” Villasis was appointed as Executive Director of Cebu IT/BPM Organization (CIB.O). Buddy and I go back 30 years to when we were trading the financial markets together.
Next month, CIB.O will hold its “2021 Transformation Summit” to discuss strategies for the big leap forward under a global pandemic with its far-reaching impact on lives and businesses. The conference will cover a wide range of topics from “World Market Trends and Innovation” to “Artificial Intelligence and Digital Education.”
But I want to center on something that Buddy posted on his Facebook page that I think is the most critical to both individuals and companies in the short and long term.
“The Covid-19 pandemic disrupted labor markets globally. The short-term consequences were sudden and severe. Millions of people were furloughed or lost jobs, and others rapidly adjusted to working from home as offices closed. Many other workers were deemed essential and continued to work in hospitals and grocery stores, on garbage trucks and in warehouses, yet under new protocols to reduce the spread of the novel coronavirus. The pandemic accelerated existing trends in remote work, e-commerce and automation, with up to 25 percent more workers than previously estimated potentially needing to switch occupations.”
That short paragraph summarizes in broad strokes the labor and employment situation that the world has faced in the last 15 months. However, when you start to fill in the blanks—such that “millions” actually means “tens of millions”—the picture is depressingly grisly. The simple idea that essential workers had to function under new protocols hardly describes the on-the-ground situation.
We all know that it was not merely having to wear a mask and/or a face shield to go to work, but getting to work held its own special nightmare. Even with all the protocols in place, there were still incredible situations that occurred. One factory in South Korea brought some 200 workers back on the line only to have one employee testing positive the next day. All 200 were forced to quarantine at the factory for a couple of weeks.
Then we come to some of the “side benefits” of the lockdowns. Even as economies began to open and employees could go back to work, you had situations where schools and daycare centers were still under lockdown. Single parents, particularly women, could not go to work because there was no place and no one to look after the children. Likewise, parents had to make choices between working and shepherding their children through online schooling.
We probably know this already. Data analysis from Harvard University, Brown University, and the Bill and Melinda Gates Foundation calculated how different employment levels have been impacted during the pandemic. The findings reveal that government lockdown orders—for the US but applicable everywhere—devastated workers at the bottom of the financial food chain but left the upper tier actually better off.
The data are damning. They offer another reminder that government lockdowns hurt most those who could least afford it. Employment for lower-wage workers, defined as earning less than $27,000 annually, declined by 23.6 percent. Employment for middle-wage workers, defined as earning from $27,000 to $60,000, declined by 4.5 percent. However, employment for high-wage workers, defined as earning more than $60,000, actually increased 2.4 percent over the measured time period despite the country’s economic turmoil.
Two weeks ago, the Philippines started vaccinating individuals in the A4 category, which includes lower income earners such as tricycle drivers. It’s about time.
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.