CHANGING WORLD
Dr. Bernardo M. Villegas
It is not true that 46 percent of Filipinos are unemployed, as reported in a major newspaper recently. The error came from an inappropriate extrapolation from a survey conducted with a small number of 1,555 respondents that was projected to the whole labor force of the Philippines estimated by the Philippine Statistical Authority (PSA) at 41.1 million workers in July, 2020.
As anyone can verify through the Internet from data of the PSA, the total number of workers in the Philippine labor force in July, 2020, was 41.1 million, down from 44.9 million in January, 2020. The labor force is defined as those actually employed and those unemployed who are actively looking for work. These individuals come from a larger set of Filipino citizens over 15 years of age who in January, 2020, were estimated to be 72.8 million among the approximately 110 million in the total population. This implies that in January, 2020, the labor participation rate was 61.7 percent but dropped to 56.3 percent in July, 2020. This means that there were less unemployed people actively looking for work in July 2020 and therefore were no longer considered part of the labor force.
The accurate figure for the rate of unemployment in July, 2020, is 17.7 percent or 7.3 million workers unemployed. Still a very large number of individuals whose respective families must be suffering from acute poverty. The comparable figure for unemployment in January, 2020, was a low 5.6 percent. If a vaccine is not discovered and widely distributed all over the world in the next 12 to 18 months, some economists estimate the unemployment rate to increase to as high as 20 percent of the labor force which would result in 8.2 million unemployed Filipino citizens.
It must also be considered that there are workers who may be considered fully employed, especially those who are in the farming sector, but are making such meager incomes that they are still looking for more work to be able to eke out a decent living. Those working in the agricultural sector account for 26 percent of the labor force. Many of them form part of the so-called underemployed workers who, according estimates in the past, could range from 15 to 20 percent of the labor force.
The number of underemployed workers could have swollen during the pandemic as former workers in the transport, tourism, restaurant, and other service sectors have been laid off and are now doing part-time jobs in their homes or in delivering goods that are being ordered through online sales.
Also considered underemployed are those workers who may have full-time jobs but who are performing tasks below their qualifications, such as nurses working as call center agents or accountants working as security guards. It is possible that the pandemic will lead to a swelling of these types of underemployed workers since people with high qualifications in the travel, tourism, and hard hit sectors may have decided to take on jobs requiring less skills and education just to be able to survive.
Economists and statisticians may have to re-examine the ways they define and measure the labor force, employment, and unemployment in the so-called new normal that will come after the COVID-19 is reasonably put under control with the discovery of the vaccine and its wide distribution all over the world. Such major changes as working at home, online education, virtual meetings and conferences may challenge old concepts of how to define the labor force. The Philippine Statistical Authority (PSA) defines the labor force as comprising the population, 15 years old or over, whether employed or unemployed, who contribute to the production of goods and services in the country.
Even before the pandemic, there have always been questions about why the millions of housewives and other family members who have been contributing to the production of goods and services as they take care of their respective families are not included in the labor force just because they are not actively looking for work outside the home. One does not have to belong to the Women’s Liberation Movement to question why the very valuable production of goods and services happening within the household are not considered part of Gross Domestic Product. In fact, it has always been recognized that the alternative measure to GDP, called Gross National Happiness (GNH), is highly correlated with the amount of tender and loving care that the wives and mothers give to the members of their families, not only in terms of intangible goods like love and affection but also of very tangible goods like delicious home cooked food, physically clean home environments, and the other services rendered gratis et amore at home.
Let me pose a very tentative hypothesis. As working at home becomes part of the new normal, despite some of its obvious disadvantages, there will be a greater sharing of household work between the male and female members of the family. Especially as the new generation of married couples will find it harder to hire domestic helpers as the country moves towards upper-middle income status, the possibility of doing more professional work from the home will also give the opportunity for the male members to help out in performing domestic chores. Even if the wives and mothers still are generally more apt in performing these tasks, they too will have greater opportunities to practice whatever profession for which they prepared in school because of the improved digital technology that allows professionals to work at home.
Father and mother can also make a significant contribution to the upgrading of the quality of education, especially at the primary and secondary levels, as they actively help their children in the blended learning approach that will become part of the new normal. Even when face-to-face classes can already be held, in my view, much of the education can still be delivered through the various distance learning methods so that there will always be an opportunity for parents to help in delivering quality education to their children.
These are my preliminary thoughts about how the new normal that will result from the pandemic can change the way economists and statisticians will measure the labor force, employment, unemployment and underemployment in the future.
For comments, my email address is [email protected].