Majority of New Jobs Created Non-Earning, Low-Paying, Part-Time Work

Published on July 21, 2009

MANILA — Some 1.3 million or the overwhelming majority of the supposedly 1.5-million new jobs created since last year are actually non-earning, poorly earning or otherwise insecure jobs including part-time work, according to research group IBON.

In April 2009, 540,000 of the jobs created were either unpaid family work (394,000) or domestic household help (146,000). IBON notes that these are jobs that notoriously earn far below minimum wage, if at all.

Another 803,000 jobs were created in the own-account category “self-employed”. This is an extraordinary increase in an employment category that has only seen increases of 45,000 (2007), 74,000 (2008) and 87,000 (2006) in the last three years. This may be taken as a kind of disguised unemployment and could indicate that many Filipinos are being driven into the informal sector or, for some, buying into the entrepreneurship hype. But while government has been aggressive in promoting entrepreneurship and small businesses many of these informal sector workers and budding entrepreneurs will be faced with disappointment. Domestic consumption is weakening further, and demand for common entrepreneurial goods will likely be low.

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There has also been a drastic 2.4 million-increase in part-time work which, at 14.3 million out of total employed of 35 million, now accounts for a massive 41% of jobs. The number of those in full-time work in turn fell by 925,000. This reflects how workers are facing greater work flexibilization arrangements alongside lower wages, salaries and benefits.

Job creation figures actually show that 1.3 million Filipinos are crowding into sectors that are stagnating or even shrinking according to first quarter economic growth figures, which implies that average incomes in these sectors are falling if not already low. The largest number of jobs created was in the agriculture sector which registered a 408,000-increase in jobs but saw year-on-year growth in production falling 0.7 percentage points in the first quarter of 2009 from the same period last year.

According to IBON, the seeming improvement in the labor market situation is illusory: there were still at least 4.2 million unemployed in April 2009 (correcting for the misleading change in the NSO definition of unemployment in 2005), and 6.6 million underemployed– or at least 10.8 million Filipinos looking for work or additional work.

Poor job creation and deteriorating quality of jobs are a significant factor in explaining why household incomes and consumption are starting to fall. Seasonally-adjusted personal consumption expenditure actually fell 3.1% in the first quarter of 2009, turning negative for the first time after about a decade-and-a-half of positive growth.

Clearly, even the surprisingly large job creation in April 2009 from the year before was not enough to increase household incomes and corresponding consumption– highlighting the need for genuine policies that will create sufficient and quality jobs, beyond government’s token measures like emergency programs and job fairs. (end)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.