Living on the edge: Vulnerable workers in the Philippines

MANILA, Philippines – While trying to take in as many passengers as he could, Arthur Crisostomo, 45, skips lunch and bites from a P6 bread to ease his hunger.

As a jeepney driver plying the route from Pacita Complex in San Pedro, Laguna to Alabang in Muntinlupa City, Crisostomo must be on the road for 12-13 hours a day to earn for his family.

“Bawal po kaming magkasakit, kasi walang kakainin ang pamilya namin [We can’t afford to get sick or else, our families will starve],” said Crisostomo.

Jeepneys are the famous symbol of the Philippines’ mode of transportation since post-World War II but those behind the so-called King of the Road live like paupers because their daily earnings can barely feed them for a day.

Crisostomo, who has been on his job in the last 16 years, said his daily income of from P400 to P1,000 may be just enough for the needs of his family. But when he or any member of his family gets sick, they must borrow money from relatives and friends. He only uses one jeepney unit and when this bogs down, he also has to borrow money from friends and neighbors so he can bring food on the table.

The number of those in the vulnerable employment sector— those who don’t have decent employment, social security, health benefits, etc. —reached 14.9 million, or 42.6%, of the 35-million actively employed, or salary and waged people in 2009.

The father of 5 complains about frequent joint pains, particularly in the legs and feet. He suffers from lingering coughs and back aches because he has to bear dry and cold weather in long hours of driving.

As most of them have to stay on the road for long hours, jeepney drivers suffer from work-related ailments such as gall bladder stones, pneumonia and other respiratory diseases, as well as ulcer and arthritis.

But since they lack the necessary social protection such as health insurance, as well as medical benefits available to regular workers, jeepney drivers do not go to hospitals or medical clinics for checkup and treatment, as such would eat into their meager income.

Roberto Parro, 25, puts it matter-of-factly: “If we spend for our medical needs, there will be no more money left to feed for our families,” he said, adding, “nagtitiis na lang [we just have to bear with our sickness].”

Vulnerable sectors

Jeepney drivers in the Philippines belong to the vulnerable employment sector who do not have social protection like health insurance, medical benefits and unemployment insurance given to wage earners and regular salary workers.

The Land Transportation Office (LTO) counts 153,260 registered jeepneys nationwide from January to August 2010, of which 38,282 are in Metro Manila. There are also 17,082 public-utility buses nationwide, of which 5,365 are in Metro Manila.

The International Labor Organization (ILO) defines vulnerable employment as the sum of own-account workers and contributing family workers. They are less likely to have formal work arrangements and lack elements associated with decent employment such as social security, health benefits and recourse to social dialogue or effective collective bargaining mechanisms.

In the Philippines, the number of those in the vulnerable employment sector reached 14.9 million in 2009, or 42.6%, of the 35-million total of salary and wage-earning people, based on figures of the Department of Labor and Employment (DOLE).

The ILO also considers working poor people under the vulnerable employment sector. It defines the working poor as those employed persons living in a household whose members are estimated to be below the national poverty threshold.

The working poor people are those who earn less than $2 a day, not enough to lift themselves out of poverty. In the Philippines, they comprise more than 30%, or 9 million, of the total 35 million actively employed, or salary and waged people in 2009.

Vulnerable employment has been used by the ILO as a proxy name to the informal economy sector to emphasize the very poor quality of jobs and no representation to social platforms for engagements.

The ILO said the global financial crisis in 2008 deepened the concern over the social impacts of globalization. It urged governments to take measures, particularly support to the vulnerable workers like youth and women. It argued that governments need to create decent jobs through effective labor-market policies as well as productive investments to achieve a sustainable economic growth.

The ILO warned in January last year that the global financial crisis is expected to have an adverse impact on developing countries where an estimated 200 million workers could be pushed into extreme poverty.

As a middle-income country and heavily dependent on the remittances of some 8 million Filipino workers abroad, the Philippines takes pride in having been relatively resilient amid the global financial turmoil.
Vulnerable employment has been used by the ILO as a proxy name to the informal economy sector to emphasize the very poor quality of jobs and no representation to social platforms for engagements.

With the record increase of remittances from Filipino migrant workers reaching more than $19 billion in 2009 and an average gross domestic product (GDP) growth of 6%in the last 5 years, there seems to be nothing to worry about.

But the situation is not the same for Flora Acebedo, an unskilled vendor of pearl accessories in Puerto Galera beach resorts in Mindoro Oriental.

Catching her breath while she treads on huge rocks that divide White Tamaraw beaches, the silver-haired woman, who never knew her age because she did not have a birth certificate, complained she has not sold any item.

“Wala pa ’kong maisaing kaya tingnan ko sa kabila kung may maibenta. [I don’t have money yet to buy rice for our lunch, I will try if I can sell these items on the other beach].”

At 45, Rowena Asuncion had to resort to offering massage services on the beach for P200 an hour, braiding girls’ hair for P150, and stitching nylon accessories from P5 to P50 to feed five children. Her husband, a boatman, accompanies tourists on island hopping.

The couple used to work as rice farmers but were forced to work on White Beach because they became heavily indebted to the farm owner as their wages were never enough to feed the family.

Rowena’s dilemma was similar to that of Flora’s. On the day she was interviewed, she had been walking on the beach for more than three hours and no one had availed of her services. At around 4 p.m., she finally got a customer for massage and earlier on, somebody bought a personalized nylon bracelet which she stitched for more than an hour, bringing her total earnings to P250 for that day.

Many jobs, not enough skilled workers

ILO director in the Philippines Lawrence Jeff said there are a lot of jobs available in the country but there are not enough skilled workers to fill up the needs, prompting unskilled ones to be absorbed by the vulnerable employment sector like Rowena, Flora and the two jeepney drivers.

Among the unexplored industries that badly needed skilled workers, Johnson said, are agribusiness, animation, medical transcription, and hotel and restaurant management. The country also needs more call-center agents but there are more business-process outsourcing (BPO) engineers and accountants in the labor market.

He said the biggest challenge for the Philippine government is to address the current and future labor-market demands and create a labor market that matches the skills requirement of industries.

Johnson said the weakening social-dialogue mechanism in the Philippines, just like in many countries, has contributed to the mismatch of skills and work available in the country.

“Social dialogue is a critical mechanism” to boost productivity and employment growth, said Johnson. “The government should set the stage for an effective social-dialogue mechanism between employers and workers’ organizations to address the mismatch.”

Government intervention is crucial in “trying to get people to decent employment,” as many occupations are available in the Philippines’ labor market. He echoed President Aquino’s inaugural speech: “going for jobs abroad should be an option and not a necessity.”

The lingering impact of the global financial crisis, he warned, could aggravate the problem of the increasing numbers of the vulnerably employed.

Globally, there are 3 billion economically active people or those salary and wage workers, but those in the vulnerable employment sector account for half of the employed people, or 1.5 billion, which is more alarming than the current 210-million globally unemployed people.
At least 80% of those in vulnerable employment live in the poor provinces under the Autonomous Region in Muslim Mindanao.

The labor-market trend at the global level is also reflected in the Philippines. Those in the vulnerable employment sector continue to increase from 13.5 million in 2004 to 14.9 million in 2009. The number of working poor reached 8.9 million in 2006 from 7.9 million in 2003.

The lingering conflict in Mindanao that has caused hundreds of thousands of people there to live in dire conditions has swelled the ranks of people in the vulnerable employment sector.

At least 80% of those in vulnerable employment live in the poor provinces under the Autonomous Region in Muslim Mindanao.

The ILO also noted a continuing rise in vulnerable employment in the agriculture-based provinces of Bicol, as well as Mindoro Occidental, Mindoro Oriental and Marinduque.

The ILO Employment Policy Convention 122 adopted by ILO members in 1964 is one of the 8 core ILO Conventions that promote decent work, which is critical in reducing incidence of poverty and hunger, and a means to meet sustainable growth.

On January 13, 1976, the Philippines ratified the convention which emphasizes the need to implement an effective employment policy as a means to achieve economic growth and development.

The treaty, in effect ensures that there is job for those qualified and seeking for it. It also guarantees that the work is productive and there is freedom of choice for each worker to maximize his skills.

The treaty also intends to address the growing number of workers in the vulnerable employment sector, particularly in developing countries like the Philippines.

Philippine framework

As part of its commitment to Convention 122, the Philippines implemented a unified policy framework for 2004-2010 aimed at creating a decent and productive employment for every Filipino worker. The policy aims to address lingering poverty and hunger by creating 6 million to10 million jobs within six years.

In 2008 the ILO Committee of Experts on the Application of Conventions and Recommendations asked the Philippine government how its targeted economic growth will produce decent jobs, considering the magnitude of the informal economy in the country.

Article 2 of the ILO Convention indicates that a signatory can decide on the measures, within a coordinated social and economic policy to achieve the goals indicated in Article 1 that seeks to design a policy that promotes full, productive and freely chosen employment.

The ILO Committee of Experts asked the government to describe measures taken to collect and analyze statistical and other data concerning the size and distribution of the labor force, the nature and extent of unemployment and underemployment and trends, as a basis for deciding on measures of employment policy.

In its response, the Philippine government cited the Labor Force Survey (LFS) being conducted quarterly by the National Statistics Office. The LFS provides statistical information such as economic structure, Filipino overseas, overseas employment and investments and employment opportunities.

The government also cited the DOLE’s Bureau of Labor and Employment Statistics (BLES) as another source of statistical information in drafting employment policy. BLES conducts national surveys on labor and employment being sourced from business companies.

Manila’s report to ILO

In its report to the ILO Committee, the government aired concern that the trend in employment was lagging behind economic growth.

Data showed that from 2004-2007, the country suffered from the so-called jobless growth where the GDP grew at an average annual growth rate of above 6%, but the average annual growth in employment lagged behind at 2%.

But the National Economic and Development Authority (Neda) said the average GDP growth rate from 2004 to 2009 was 4.4%.

“Underemployment is a more serious problem than unemployment as it affects one in every five Filipinos and cuts across age and sex groupings,” said the DOLE in its reply to the ILO Committee of Experts.

The DOLE also noted that underemployment is more prevalent in less developed regions where the farm sector and self-employment predominates.

With the rising number of BPO companies in the country, the DOLE cited a 4.1% increase in the service sector and a modest 2.5% increase in industry employment in 2007; but it noted marginal growth at 0.6% in the combined agriculture, fishery and forestry sector.

With a 2.9% growth in the wage and salary employment sector, the DOLE said jobs were created for 474,000 individuals in 2006.

Scourge of underemployment

Meanwhile, underemployment remains the country’s weakness in the labor-market policy approach.

From 2004 to 2006, underemployment rate rose from 17.6% to 22.7% or by 682,000 to 7,467,000 individuals.

The ILO explained that the informal or the vulnerable employment sector comprises an important part of the economy and the labor market.

In countries with high rates of population growth or urbanization, the vulnerable sector tends to absorb the expanding labor force particularly in urban areas.

As population growth outpaces the capacity of industry to absorb new labor, urban unemployment and rural underemployment are compounded.

“Informal-sector employment is a necessary survival strategy in countries that lack social safety nets, such as unemployment insurance, or where wages especially in the public sector and pensions are low,” said the ILO report on Key Indicators of the Labor Market.

Statistics from the Labor department showed that from 2004-2009, the number of wage and salary workers rose from 31.6 million to 35 million. But in the same period, the number of those in vulnerable employment also rose from 13.5 million to 14.9 million.

The working poverty rate in the Philippines also increased by 3.1%, between 2003 and 2006, from 7.9 million to 8.9 million.

Director Nicon Fameronag, head of the Communications Division of the DOLE, said the country’s high population growth rate at 2.36% every year puts a heavy pressure on a deficit-stricken government.

Population growth should not be a problem, he said, if the government had enough resources to provide more people with public services, employment and housing. “But in a country where the budget is already stretched and where poverty is high to begin with, population growth becomes a major issue,” said Fameronag in an interview at the DOLE office in Manila.

He asserted that, “rapid population growth hinders development” for two interrelated reasons: First, it reduces growth in per-capita incomes—and thus savings, cutting the funds available for investment in productive capacity.

“This underinvestment in turn reduces overall economic growth and prospects for poverty reduction.”

Second, as population growth outpaces the capacity of industry to absorb new labor, urban unemployment and rural underemployment are compounded.

The worsening concern over more people joining the vulnerable employment sector may be addressed through an effective employment policy that will provide sustainable and productive jobs for farmers and farm workers.

ILO explained that poverty as a policy issue overlaps with the informal or vulnerable employment sector. “There is a link [although not a perfect correlation] between informal employment and being poor.”

In the Philippines, majority of the vulnerably employed are in three regions whose people suffer from abject poverty and the source of livelihood is agriculture: the ARMM, Bicol and 4-B or Mimaropa (which stands for Mindoro Oriental and Occidental, Marinduque, Romblon and Palawan).

Neda official Dennis Arroyo said a third of the poor are in agriculture. At least 33% of the population, or 4 million families in the Philippines, live under less than a dollar a day, according to the Neda.

But the growth areas are driven by the services and industry sectors that require highly educated and skilled people and more investments.

The worsening concern over more people joining the vulnerable employment sector may be addressed through an effective employment policy that will provide sustainable and productive jobs for farmers and farm workers.

According to Director Fameronag, the Labor department has been implementing a number of interventions to retrain and retool people in the vulnerable-employment sector to boost their skills and knowledge and facilitate their entry into formal employment.

A number of programs are also being implemented to provide livelihood assistance to the working poor so they can start up their small businesses.

Five years since they left the farm in a remote and rebel-infested town of Mamburao in Mindoro, Rowena went through a series of skills training by the Technical Education and Skills Development Authority (Tesda). Although trained to provide services like body massage, hair-braiding and stitching nylon-made beach accessories, Rowena’s life did not improve and her family remains quite poor because she does not have a stable income as well as the benefits associated with formal employment.

Recognizing these and other trends, the ILO’s Decent Work Agenda engages governments to adopt an employment policy that pushes economic growth while generating sustainable, productive and freely chosen employment.

Decent work goals reflect the aspirations of people for better opportunity and income; recognition of their rights, as well as family stability and personal development.

Expert groups at the 2005 review meeting of the United Nations (UN) Millennium Development Goals have developed a new target that integrates the goal of eradicating poverty and hunger with providing productive and decent employment.

Under the MDG target 1 that eradicates extreme poverty and hunger, governments need to achieve full and productive employment and decent work for all.

The MDG “target 1B” directly addresses the rising number of those in vulnerable employment and working poor sectors as part of eradicating poverty and hunger.

Millions of those in the vulnerable employment sector like Rowena and Arthur, meanwhile, face each day with determination to earn a decent income for their families even to the detriment of their health.
Decent work goals reflect the aspirations of people for better opportunity and income; recognition of their rights, as well as family stability and personal development.

They face uncertain futures and keep working hard without social benefits, as well as health and medical insurance. Most of them are seen as eyesores—particularly those pushing carts and rickety vending machines in busy streets and in the corners of high-rise buildings.

In the case of the thousands who earn a living plying the streets of Manila with the improvised tricycles called kuliglig, last week’s violent dispersal by policemen, that left two people dead, reflects the perils of those in trades that have been tagged illegal. One ex-convict, shouting at the top of his voice, told a TV reporter driving a kuliglig was his last shot at a decent job, and warned authorities they were driving people back to a life of crime.

“Maliit ang tingin ng tao sa’min [people look down on us],” said Rowena sadly. She said most tourists, both local and foreign, would usually shoo her and her fellow workers at the beach when they offer massage and hair-braiding services.

Rejection is just the first tragedy. Around the globe, billions of people like Rowena live on the edge each day, because the margins are never flexible enough to let them in. –Estrella Torres, Business Mirror