Countries in Asia and the Pacific (APAC), including the Philippines, could suffer sluggish economic growth, with more people jobless and less productive if governments do not prepare for the mega changes in workforces.
This warning came after Alex Ivaschenko and Helen Osborne, authors of an Asian Development Bank (ABD) blog released on Jan. 13, reported that two-thirds or 67 percent of the labor force in APAC countries hold informal jobs.
“Two-thirds of the region’s workforce [hold] informal jobs, which typically offer low, irregular pay and no social protection,” Ivaschenko and Osborne said.
Many informal jobs involve underemployment, such as low pay or fewer hours than desired.
Last week, the National Economic and Development Authority (NEDA) stressed the decline in the underemployment rate seen in November 2024, which decreased by nearly one percent to 10.8 percent from 11.7 in November 2023.
This figure is equivalent to 5.35 million of the 49.54 million employed individuals who desire additional work hours or a new job with longer hours. The number of underemployed Filipino workers in October 2024 was 6.08 million.
This reflects “better job quality” in the Philippines, NEDA said, noting that fewer workers are looking for additional work hours or jobs in addition to their existing jobs.
Still, there is a shortage of quality jobs in the region: “informal employment is far more common in developing Asian economies (71 percent) than in advanced ones (22 percent).”
Further, Ivaschenko and Osborne noted that “even before the COVID-19 pandemic widened poverty and inequality, high growth rates failed to improve labor market participation or productivity.”
Adapting to megatrends
Megatrends, or big changes, including population growth, climate change, and advanced technologies, are pushing governments to find new ways to boost productivity and improve jobs.
However, existing problems in the region’s job market are holding back progress in both the economy and society.
Therefore, Ivaschenko and Osborne encouraged governments to create jobs tailored to these massive trends. “The policy objective should shift from economic growth per se, to inclusive and sustainable growth centered on quality jobs for productivity.”
Among the major recommendations was exercising unbiased reform packages to cater the entire workforce.
“It is important to avoid reform packages that only benefit more educated and experienced workers; these will not reach most of the workforce, nor tackle the underlying constraints to better productivity performance in the region,” Ivaschenko and Osborne pointed out.
“These evolving megatrends are prompting new thinking around how to unlock labor productivity in markets dominated by informality and the services sector,” they also said, adding the importance of government intervention because even white-collar service jobs could be replaced by automation in the future.
The authors have urged the policymakers to adapt with the pace of megatrends by preparing measures in case of major shifts. They likewise noted that “future demand for labor cannot be fully known, as effects of megatrends continue to evolve and the full range of their implications is a process of discovery.”
“Failure to prepare adequately for a new era of work risks locking in low-productivity and jobless growth across Asia and the Pacific,” Ivaschenko and Osborne concluded.