ALTHOUGH the outgoing Aquino administration boasts that it has increased employment in the country during its watch, the World Bank said on Friday that most of the jobs in the country are “bad jobs” that cannot lift Filipinos out of poverty.
“Economic growth in the last 10 years has created enough jobs to absorb the growing labor force,” said Mara Warwick, World Bank Country director for the Philippines.
“For many Filipinos, however, the main challenge is having jobs that can lift them out of poverty,” Warwick said, defining “good jobs” as those that are “formal, permanent, well-paid, and offering social protection while “bad jobs” temporary, casual, informal, precarious and low-paid, often with very little or no social protection.
“In Europe the situation is very much different, said Jan Rutkowski, lead economist at the World Bank’s Social Protection and Labor Global Practice. “People who have jobs are seldom poor. It is the unemployed, disabled, pensioners who are poor.
“Here [in the Philippines] the situation is very much different. The majority of the poor are the people who have jobs,” Rutkowski said.
The report said this prevalence of poverty among workers reflects the scarcity of “good jobs” and low-earning capacity of poor workers.
“Low-earning capacity of the poor reflects their low education and skills, limited access to formal jobs, and low bargaining power of informal workers,” said Rutkowski.
“The scarcity of ‘good jobs’ reflects the structure of the Philippine economy where low-value-added activities predominate. This is partly due to constraints in the investment climate and the high cost of doing business in the formal sector,” he added.
The report noted that around three-quarters of all jobs and two-thirds of urban jobs are informal. Among wage workers, 6 out of 10 are hired informally. Informal wage workers lack employment contracts and social insurance, and are not protected against unfair dismissal.
Many of the existing jobs require few skills, with laborers being the largest occupational group (apart from farmers). Even outside agriculture and in urban areas, unskilled workers account for nearly one-fourth of total employment.
As many as 44 percent of workers have less than secondary education, which is substantially higher in rural areas (57 percent), but is high even in urban areas (30 percent). Among youth from poor families, those who have not completed secondary education exceed 60 percent.
The report said that investment in quality education and completion of secondary education level will further improve job prospects.
However, it noted that even educated workers are often forced by necessity to take unskilled jobs and work as laborers.
The report showed that 30 percent of workers with secondary education hold unskilled jobs, and 35 percent of laborers have at least secondary education, reflecting the scarcity of good jobs and possibly a skills mismatch.
The report emphasizes a three-pronged approach to reduce in-work poverty. The first one is to continue investing in education and skills of disadvantaged youth to raise their earning capacity, particularly in rural areas.
It also encouraged the government to simplify labor regulations to support structural transformation and reallocation of workers from less to more productive activities.
It also cited that an improvement in the investment climate and lowering the cost of doing business in the formal sector will trigger to create more and better jobs, and sustain high economic growth.
