Losing one’s job is the most upsetting thing that an individual can go through short of the loss of a loved one. Economists therefore consider the unemployment rate to be one of the most important indicators both of the economy and of well-being in general. When people who want and need to work cannot find suitable employment, they lose not only income but self-esteem (Robert Guell, 2003).
According to Merriam-Webster Dictionary, labor is a human activity that provides the goods or services in an economy. It is the services performed by workers for wages as distinguished from those rendered by entrepreneurs for profits. On the other hand, employment is an activity in which one engages or is employed. It also refers to a contract between two parties, one being the employer and the other being the employee. In a commercial setting, the employer conceives of a productive activity, generally with the intention of creating profits, and the employee contributes labour to the enterprise, usually in return for payment of wages and to the extent that employment or the economic equivalent is not universal, unemployment exists. However, according to Business Dictionary, labor is the aggregate of all human physical and mental effort used in creation of goods and services. It is a primary factor of production. The size of nation’s labor force is determined by the size of its adult population, and the extent to which the adults are either working or are prepared to offer their labor for wages.
Labor and employment plays a major role in the economy. There some labor and employment factors that people cannot notice that can affect the economic stability of a country. In some point, there are always people lose their jobs and makes up the unemployment line. There is considerable debate amongst economists as to what the main causes of unemployment are. Keynesian economics emphasizes unemployment resulting from insufficient effective demand for goods and service in the economy. Others point to structural problems inherent in labor markets. Classical or neoclassical economics tends to reject these explanations, and focuses more on rigidities imposed on the labour market from the outside, such as minimum wage laws, taxes, and other regulations that may discourage the hiring of workers.
Background of the Study
A country with a population of 92 million people, the Philippine economy expanded at a modest growth rate of 4.7% per annum over the ten-year period 2001-2010. Measured in terms of Gross Domestic Product (GDP), the economy grew almost uninterrupted from 2001 (1.8%) to 2004 (6.4%). The pace of growth slowed down in 2005 (5.0%) and 2006 (5.3%) but was up again in 2007 (as in the global economy) recording the second highest growth (7.1%) during the decade. With the onset of the global financial crisis, the growth figure declined sharply in 2008 (3.7%) and bottomed to 1.1% in 2009. With the global economic recovery in 2010, the domestic economy again posted a rebound, growing by 7.3%, on the back of firm recovery in manufacturing, merchandise exports and service based industries (trade and private services), bolstered by strong consumption and sustained inflow of remittances (DOLE, 2011).
Statement of the Problem
Economic growth in the past decade (2001-2010) has not explained to corresponding development in employment levels. Employment growth (2.9%) tended to be slower than economic growth (4.7%). Likewise, unemployment rates showed little improvement despite periods of economic growth.
Low economic growth is attributed to low investments and slow technology progress. The country is also prone to economic shocks, natural disasters and extreme weather disorder that affect agriculture, which is a labor-intensive sector.
The insufficiency of employment opportunities in the country is causing the out-migration of professionals and skilled workers and is discouraging their return. Skilled migration...