Unemployment and National Statistics Office

Rising of Unemployment Rate

I. Introduction:

Unemployment is a very common cause of poverty in the Philippines since there are several Filipinos who are unemployed plus the fact that there are many companies that are affected of the global economic crisis. And the least thing that you can do about unemployment is to find a best way on generating money like you can accept laundry services, plumbing services, or electrical repair services if you are skilled enough to do the job. Then, you could start a certain profitable business like food, house or a small store that does not require you much capital so that you will not find it hard to save enough money from the services that you are offering.

Unemployment has remained high in the Philippines, at almost twice the level of neighboring countries, despite relatively fast employment growth in the past decade. Employment growth was not sufficient to reduce unemployment because of rapid population growth and increased labor force participation. This paper shows that Philippine employment growth and unemployment declines were positively correlated with real GDP growth and, to a lesser extent, negatively with the real minimum wage. The key policy implications are that higher economic growth and moderation of increases in the real minimum wage are required to reduce unemployment. A. Research Statement: The labor force is defined as the number of people employed plus the number unemployed but seeking work. The participation rate is the number of people in the labor force divided by the size of the adult civilian no institutional population or by the population of working age that is not institutionalized. The non labor force includes those who are not looking for work, those who are institutionalized such as in prisons or psychiatric wards, stay-at home spouses, kids, and those serving in the military. The unemployment level is defined as the labor force minus the number of people currently employed. The unemployment rate is defined as the level of unemployment divided by the labor force. The employment rate is defined as the number of people currently employed divided by the adult population or by the population of working age. In these statistics, self-employed people are counted as employed.

Variables like employment level, unemployment level, labor force, and unfilled vacancies are called stock variables because they measure a quantity at a point in time. They can be contrasted with flow variables which measure a quantity over duration of time. Changes in the labor force are due to flow variables such as natural population growth, net immigration, new entrants, and retirements from the labor force. Changes in unemployment depend on: inflows made up of non-employed people starting to look for jobs and of employed people who lose their jobs and look for new ones; and outflows of people who find new employment and of people who stop looking for employment. As the economy sinks further and unemployment continues to grow, a social explosion is building up as working people find it increasingly impossible to make ends meet.
Past Research The economic crisis is hitting the Philippines and countries in the developing world with unemployment. Nevertheless, there are weak signs of recovery in agriculture. These are the findings from a study of the Asian Development Bank (ADB), which considers the industry sector most at risk.

According to the ADB in the second quarter of 2009 employment in the Philippines fell by 7%, while agriculture grew by 2.6%. This trend is also confirmed by the National Statistics Office - NSO which reported 2, 719 million unemployed in the month of October 2009. This is 191 thousand higher than the 2.525 million unemployed in October 2008. This figure also reflects the damage of typhoons Ketsana and Parma, which between September and October brought the capital, where the large majority of industrial establishments are based, to its knees.

"In 2010 the government will create 1.5 million jobs - said Augusto Santos, director of the program for economic planning - they will be concentrated in service industries such as trade, finance and banking industry". For now, the NSO has registered about 944 thousand new jobs in 2009. The goal promised by the government in 2008 was more than 1 million. The October unemployment rate stood at 7.1 percent, unchanged from a year earlier but up slightly from July’s 6.9 percent, according to the latest quarterly report from the National Statistics Office. The rate of underemployment — people working less than 40 hours a week and looking for fuller employment — jumped to 19.6 percent in October, from 19.4 percent a year earlier and 17.9 percent in July. High unemployment came even though the economy growth hit 7.5% in the first three quarters of 2010. The government looked dismayed in the light of the figures yet still hopes for improvement. Although 61.2 million of the Philippines’ 95 million people are aged 15 and over, the statistics agency said just 39.3 million could be considered part of the labor force, with many others not even looking for work and that one in three were unskilled labor.

Present Research Employment level as well as its quality improved in April this year compared to the same month last year, according to the National Economic and Development Authority (NEDA). The NEDA made this statement after the National Statistics Office (NSO) released the results of the latest Labor Force Survey showing an increase in the country’s employment rate to 92.8 percent from 92.0 percent in April 2010, and a decrease in the unemployment rate to 7.2 percent from last year’s 8.0 percent. Based on the NSO survey, total employment generation for the period reached 1.41 million, higher than the 416,000 net employments in April 2010.

Socioeconomic Planning Secretary and NEDA Director-General Cayetano W. Paderanga, Jr. said that the improvement in net employment was boosted by the agriculture sector, contributing 645,000 net workers to post an employment growth of 5.6 percent in April 2011. “This supports the second quarter 2011 palay and corn production growth estimates of 14.2 percent and 70.9 percent, respectively, by the Bureau of Agriculture Statistics,” said Paderanga. He also noted that the quality of employment in April this year improved. “This can be seen in the 5.0 percent increase of workers with wages and salaries, 3.5 percent rise of full-time workers, and the decrease of unemployed youth from 18.8 percent last year to 16.6 percent in April 2011,” he said.
Apart from the agriculture sector, the number of newly employed persons in the services sector numbered 632,000, or a 3.4 percent growth from last year. On the other hand, employment growth in the industry sector slowed down to 2.4 percent, or around 130,000 net employments, from last year’s high growth of 7.8 percent. Paderanga also said that the 2.9 million unemployed persons this year was lower by around 228,000 persons compared to the same period last year. However, the underemployed, or those already working but still expressed the need for more work, went up from 6.3 million (17.8%) in April 2010 to 7.1 million (19.4%) in April 2011. “While the labor market performance based on the April 2011 Labor Force Survey is considered favorable, the government must still continue to fast-track the implementation of programs and policies that help create employment and improve productivity,” said Paderanga.

This means more than one in four working-age Filipinos are either unemployed or looking for more work.

Future Research The problem of unemployment in developing countries during the past half century has been the result of a period of rapid but unbalanced development. The most obvious of these is rapid population growth, which resulted in the tripling of the world's population over the past seven decades. The world's population rose from about 2 billion in 1930 to 2.5 billion in 1950 and 6.6 billion in 2006, a growth of 164 percent.

This population explosion was itself the result of a dramatic improvement in human life expectancy around the world due to improvements in nutrition and health as a result of higher food production and the dissemination of medicines. The sudden and dramatic reduction in infant mortality and increase in life expectancy generated imbalances in developing societies, because they were not immediately accompanied by commensurate changes in reproductive behavior or proportionate expansion of education institutions and economic activity.

It has taken half a century for the main impact of the population explosion to gradually subside. Changes in reproductive behavior have brought down the birth rate in most parts of the world nearer to replacement levels. Gradually educational systems in these countries have also been radically expanded to accommodate the surging size of the student age population. Meanwhile, faster rates of economic growth, particularly in Asia have accelerated job creation to the point where it is matching or even outpacing growth of the labor force. Lower birth rates, higher levels of education and training, and higher rates of economic growth are gradually restoring the balance between population and employment opportunities.