ILO study: COVID-19, digitalization double whammy for 18-M PH workers

by Bernie Cahiles-Magkilat, Manila Bulletin, 19 Aug 2020

More than 18 million workers in the Philippines are affected by the dual destructive impact of digitalization and COVID-19 disruption, according to a study by the International Labor Organization (ILO).

ILO Employment Specialist Felix Weidenkaff presented its study on “COVID-19 Labor Market Impact in the Philippines: Assessment and Policy Responses,” which showed that 18 million Filipino workers would be exposed to the dual destructive impact of COVID-19 and digitalization.

According to the study, occupations can be classified based on the extent to which they are susceptible to destructive, which destroys occupations that require skills which are substituted for by machines, or transformative digitalization, which affects occupations without necessarily replacing them.

Examples of occupations that are considered collapsing because of their exposure to destructive digitalization and COVID-19 job disruption include real estate sector and administrative and support service activities. These will affect building caretakers, security guards and contact center information clerks and salespersons.

Also classified as collapsing occupations are those in accommodation and food services and arts, entertainment and recreation such as food service counter attendants, cashiers and ticket clerks.

Machine terrain occupations are also affected to include those working in the manufacturing, transportation and storage like electrical and electronic equipment assemblers, supply, distribution and related managers.

The financial and insurance activities and professional and technical activities like bank tellers and related clerks, debt collectors, and general office clerks face potential collapse in their occupations.

In terms of the impact of the COVID 19 on Philippine labor market, the ILO study showed that 10.9 million jobs are at medium or high risk of disruption. In April 2020 alone, ILO showed that full time employment contracted by 65.3 percent.

About 900,000 manufacturing jobs are exposed to COVID-19 disruption. Manufacturing subsectors that benefit from value chain connectivity are likely to face medium or high-risk of jobs disruption.

But ILO noted that some subsectors such as food products, wood products, chemicals, pharmaceuticals and print and reproduction of recorded media are less likely to face job disruptions. It said that job disruption is most severe in the electrical and electronic equipment subsector, as well as in garments, textiles and footwear.

The ILO study further noted that workers especially vulnerable to COVID-19 disruption include informal workers, youth, overseas Filipino workers and women.

About one-third of the total workforce in the country is engaged in ‘vulnerable employment’ and tends to be paid less, enjoy little labor protection and are likely to be exposed to occupational hazards.

More than 20 percent of workers in transportation, storage, accommodation and food services, wholesale and retail trade and real estate activities are comprised of part-time workers and engaged in vulnerable employment.

In terms of the youth employment, ILO said that jobs of around 1.7 million young people are at risk for COVID-19 induced job disruption. For young people, ILO said the COVID-19 crisis has resulted in multiple shocks: disruptions in education and training, disruptions to employment and income and increased job search constraints.

As of July this year, ILO said that more than 106,200 repatriated Filipinos had returned and face re-entry and reintegration challenges due to COVID-19 and since almost all countries are affected by the pandemic, these OFWs will have to rely on domestic job opportunities.

In addition, about 4.1 million women workers alone stand to be disrupted by COVID-19, particularly in industries such as wholesale and retail trade as well as in accommodation and food service activities, compounding other challenges related to increased gender-based violence, unpaid household and care work, and challenges of family planning.

With the massive job disruptions in the country, the ILO study has urged for effective and appropriate national policy responses. ILO has proposed four pillars: stimulating the economy and employment (active fiscal policy, accommodation monetary policy, lending and financial support to specific sectors, including the health sector); supporting enterprises, jobs and incomes; protecting workers in the workplace; and relying on social dialogue for solutions.