Labor day, but where are the jobs?

Its’ not just the Malacañang decision to subordinate the timing of Labor Day–—a sacred date internationally observed on May 1—to holiday economics that  is the problem. Telling workers and employers to go on holiday on May 3, the Monday after, so as to encourage workers and their families to “enjoy” a longer weekend and, it is hoped, boost the economy, is also not the biggest irony of the times.

The stark truth, plain and simple, is there aren’t enough jobs in the country and from all indications, it will take a while—way after the term of the next president—before the Philippine economy can be redirected and refocused in order to have a wider base and allow all other sectors to grow enough to sustain jobs for everyone who needs them. It will also take a while before the economy is weaned away from its long-term addiction to the money of its migrant labor, 8 million according to most estimates, with their remittances ($17.3  billion in 2009) fueling much of the economic activity in the country. Where before the conventional wisdom was that Overseas Filipino Workers (OFWs) made only the mall owners happy, now most projections by other sectors are factoring in the potential wealth—actually hard-earned savings—of the OFWs, from property and construction; to schools and hospitals; wellness establishments and tourism-oriented outfits and schemes, among others. But surely, from all considerations, to permanently rely on remittances is an untenable spot.

The past several weeks of the campaign for the May 10 elections have seen many of the candidates simply taking issue with the way the present administration has padded achievements in employment and jobs generation, and with the myopic policies in labor protection and welfare.  Indeed, the vaunted “Oyster” on the shirts of those street sweepers hired by the Arroyo administration cannot by any stretch of the imagination count for serious job generation; although, if the government  experts are to be asked, they provided vital safety nets for the poorest sectors in a time when economic expansion was impossible because the world was still reeling from its worst economic crisis since the Great Depression. Such emergency-type employment may be justifiable, but according to independent experts, the labor record of the administration for the past nine years has been mostly characterized by ad hoc responses, as industries were gutted by globalization and foreign direct investments remained relatively low compared to the Philippines’ neighbors. Beyond the sharp increase in jobs in the business process outsourcing sector that Mrs. Arroyo often likes to cite, according to critics there’s little else by way of substantial job generation that has been achieved the past nine years.

The challenge

But before the challengers to the top position of the land continue with their know-it-all and self-righteous stance, it’s good to be reminded of what exactly is the challenge facing the country they want to lead.

At least 15 million jobs must be created in five years in order to close the unemployment gap, according to a recent study by the former president of the Philippine Economic Society, Dr. Fernando Aldaba.

Another study, by Dr. Jesus Felipe, principal economist Central and West Asia Department of  the Asian Development Bank, estimates the labor force to have grown roughly 50 percent by year 2030, or to 52 million from the estimated number of the labor force as of year 2005. [An earlier report in this paper mistakenly reported the 52 million as the total number of unemployed].

Aldaba’s basis for the 15-million jobs figure needed to be created in five years: this pertains to 2.82 million Filipinos who are jobless, the 7.3 million who are underemployed and hold only part-time jobs during certain periods of the year, and 5 million returning OFWs whose work contracts have expired and need to reenter the local employment mainstream. The eight-month study he did, used as basis by the National Competitiveness Council (NCC) for crafting an industrial policy, was hoped to be presented to the new leaders of the land after May 10, precisely to show the seriousness of the situation.

“We must be able to create an average of 3 million quality jobs a year for the next five years to be able to bridge the real unemployment gap and bring down the unemployment rate at 2 percent by the end of the fifth year,” Aldaba said in a statement issued by the Philippine Exporters Confederation. That sector was one of those badly hit since the global crisis started to be felt in late 2008, as many of the businesses they were selling to were affected by the crisis. Their ordeal was compounded by the foreign-exchange fluctuations; like the OFWs, the value of the dollars they earned were being steadily whittled down.

Complicating the situation of several business sectors this year is the coming into force of several free-trade agreements that knocked down tariffs on a wide range of goods, exposing them to tough competition even while they had barely recovered from the bad years.

Investments crucial but hard to source

Ernesto Santiago, the president of one of the export group’s pillars, the Semiconductors Electronics Industries of the Philippines Inc., said key to developing most sectors are investments—of which, observers added, local sources are stretched and foreign ones are few and far between.

Consider the cost of creating quality jobs: in the electronics sector, said Santiago, P1 million worth of investment is needed to create a quality job; for garments, the investment for one job is at least P50,000; and for furniture, P30,000.

Other business leaders attending the forum where the NCC sought to present both the challenge, as presented by Aldaba, and the prospects for meeting them, came from two sectors often touted as good job generators: mining and tourism.

Tourism, under the helm of Secretary Ace Durano—to his credit, one of the few hardworking and creative performers in the Cabinet—has opened up several new niches like wellness and medical tourism, and ecotourism, and introduced to the world other alternative destinations like Bohol and Camarines Sur, but it’s a sector where risks can easily wipe out the gains. Example: when the European Union barred Philippine carriers from flying to Europe , as it played catch-up to an earlier US decision to downgrade Manila’s aviation rating to category 2, scores of tourism agencies were forced to cancel packages for the Philippine area.

As for mining, the head of the Chamber of of Mines of the Philippines , Benjamin Philip Romualdez, as expected, lamented the policy incoherence and flip-flops in the Philippines that had hobbled mining prospects here, especially in the last few years when an unpopular leader could be easily lobbied by various groups.

Romualdez zeroed in on the decision of certain local government units (LGUs) to declare a moratorium in the development of mining projects in their localities. In other instances, the former environment secretary Lito Atienza found himself at odds with certain LGU chiefs who tried to carry the spirit of the local government code to extreme by insisting on having the only say on matters of approving projects with environmental impact, leading to fears among national agency planners that without genuine capacity having been built into LGUs, the control over local-based resources could degenerate into one of rent-seeking at the local levels, as seen in the case of, for instance, the quarrying of Pinatubo-affected areas in Pampanga where hundreds of millions of pesos are believed to have been pocketed by local officials.

The candidates’ take

Given these basic challenges, one wonders anxiously how serious are the candidates for top positions in the May 10 polls, given the inordinate attention devoted to mudslinging and tweet-level exchanges. Responses in some of the most important forums may be a window to their intent, but hardly.

At the forum sponsored by the Foreign Correspondents Association of the Philippines (Focap) in February, only four candidates thought of including initiatives in promoting human capital when asked about their priorities should they get elected. Unfortunately, two of the three frontrunners, Sen. Manny Villar and former president Joseph Estrada, didn’t attend that forum.

JC de los Reyes, heckled in many quarters for seeking the top position—prematurely, it’s been said—actually provided the most categorical, quick response that put human-capital front and center of his agenda “as soon as you’re elected.” He said he wants his First 100 Days to focus on health care, affordable medicines in, among other places, the health center; and to do a comprehensive study on the labor situation and policy, with rampant contractualization among those to be reviewed.

Gilberto Teodoro similarly listed health and education first among his priority agenda if elected:  “institution of a universally participative health-care scheme [with] mandatory coverage” and educational reforms, including “implementation of the basic education reform road map and institutionalization of student loan programs for college.”

Sen. Richard Gordon, whose “a Kindle for every child” has drawn mixed reactions, listed as fourth of his top 5 priorities the boosting of high school and vocational education, adding by way of example, “so that high school graduates can drive bulldozers and backhoes.”

While his top 5 priority list focused at length on fiscal reform and on pursuing investigations against wrongdoing, Sen, Noynoy Aquino did say, in his closing statement, that “only an empowered government can empower its citizenry,” and that, if misgovernance is redressed, then resources can be freed up for “education and jobs” for all who need them.

Villar, absent from Focap, has repeatedly touted his credentials in boosting small and medium enterprises (SMEs), both from practice as businessman who built a multibillion-peso property empire and from legislative work.

Another Focap absentee, Estrada, has taken pride in the fact that while his first major bill as senator—the establishment of the carabao breeding center in Nueva Ecija—has been disparaged in some sectors, it has since become a global showcase for best practices in developing the agriculture sector and empowering the farm population.

Why human capital?

It will take so much more, however, for any one leader—even one armed with a new mandate—to truly meet the formidable challenge of steering the economy in a way where growth is sustainable and broad-based, and jobs are available, even as the human-capital requirements for  such are taken care of.

The comprehensiveness and multidimensional approach  required of policy and programs is perhaps illustrated in the recent keynote address by Sen. Edgardo Angara at the annual conference of the Employers Confederation of the Philippines.

The reform agenda that Angara outlined before the 31st Ecop conference puts human capital as a first, indispensable thread among four areas of development, the others being: environment, energy and food security; income, jobs and wealth creation; and governance and institutional reform.

Noting the tentativeness and fragility of the economic recovery in both the country and its neighbors on which it relies also for trade, investments and jobs, human capital becomes imperative in the  agenda, Angara said. “Our human resources is the foundation of our drive towards progress. Foremost to this is raising our educational qualifications and shoring up our failing health care system.” Ironically, he noted, while the country has relied on its labor exports to shore up its economy for nearly four decades, it has underinvested in its labor resource, whether in education or health care. Compared with its neighbors, it spends only 2.3 percent of its national income on education, Angara said, adding, “second, marginalization due to poverty and geographical limitation hinders children from acquiring quality education.”

Given all that, it’s easy to see that holding job fairs and scrounging for nonwage packages in time for Labor Day just won’t do the trick in terms of satisfying labor. Only time will tell if the next president after May 10 will be up to the challenge. And from experience, most Filipinos know there really isn’t much to look forward to by way of lasting, comprehensive adjustments in human progress.  L.M. Fernandez, with reporting by Cai U. Ordinario

In Photo: Filipinos flock to a convention center in Pasay City to look for jobs at the 2010 Labor Day job fair themed “Manggagawang Pilipino Kaagapay sa Pagbabago.” Labor groups criticized the lack of any  wage or nonwage announcement. (Nonie Reyes)