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Unemployment Rate

By Khonztyn1 Feb 27, 2013 7798 Words

Today, mostly Filipino people are experiencing unemployment crises because of lack of job opening in our society. Even those who are fresh graduates in college are hard to get job, mostly those graduated in college are jobless and they are vacant only in their house.

This is the reason why Philippines tackles unemployment rate in economic crisis. Once, there are job openings that need many options and requirements, so other people are not qualified of it and they may experience hard getting a job.

Also, because of unemployment crisis here in Philippines, mostly Filipino are forced to seek greener postures abroad so they need to leave their families to provide them a better life and other reason of it, other business is closing so the workers on that business will become unemployed.

Keynesian economics emphasizes the cyclical nature of unemployment and recommends unionization, minimum wage laws, taxes, and other regulations that they claim discourage the hiring interventions it claims will reduce unemployment during recessions. This theory focuses on recurrent supply shocks that suddenly reduce aggregate demand for goods and services and thus reduce demand for workers. Keynesian models recommend government interventions designed to increase demand for workers; these can include financial stimuli, publicly funded job creation, and expansionist monetary policies. Georgists, half a century before Keynes, also noted the cyclical nature but focused on the role of speculations in land which pushes up economic rent, because rent must be paid mostly from wages (yield of capital), economic activity cannot be sustained in the rent bubble, which finally burst resulting in recessions or depressions. Once the speculation is wrung out of system the cycle of land speculation begins again. Henry George therefore advocated the taxation and land values (Single tax) to stop land speculation and in order to eliminate taxation of labor and capital. George opposed land nationalization and Marx’s theories. Marxism focuses on the relations between the owners and the workers, whom, it claims, the owners pit against one another in a constant struggle for jobs and higher wages. The unemployment produced by this struggle is said to benefit the system by reducing wage costs for the owners. For Marxists the causes of and solutions to unemployment require abolishing capitalism and shifting to socialism and communism.

In addition to these three comprehensive theories of unemployment, there are few categorizations of unemployment that are used to more precisely model the effects of unemployment within the economic system. The main types of unemployment include Structural Unemployment which focuses on structural problems in the economy and inefficiencies inherent in labor markets including a mismatch between the supply and demand of laborers with necessary skill sets. Structural arguments emphasize causes and solutions related to disruptive technologies and globalization. Discussion of Frictional Unemployment focus on voluntary decisions to work based on each individual’s valuation of their own work and how that compares to current wage rates plus the time and effort required to find a job. Causes and solutions for frictional unemployment often address barriers to entry and wage rates. Behavioral Economists highlight individual bias in decision making and often involve problems and solutions concerning sticky wages and efficiency wages.


This research work entitled “Unemployment Rate: Tackles on Economic Crisis” is hereby submitted and accepted by Mr. Adelio L. Glodoviza with the grade ____.

Submitted this ___ day of March 2012 at Pagbilao Academy Inc. Pagbilao, Quezon.

Billy Joe L. Porte

Mr. Adelio L. Glodoviza


I want to dedicate this Thesis to all the people that helped me made and finish this work.

Who taking care and giving me strength in every research and activities I did and also for giving me the right knowledge for this kind of work.

Mr. Adelio L. Glodoviza for giving us many information and facts for many things that I never known before. Also for sharing us his knowledge and ideas about economic crisis to become easy for us to understand this kind of topic and also for giving us time to finish this for a long time.

Mr. Jomar G. Porte and Fobelle L. Porte that gave me full support in every activities. For giving me financial support every time I conducted researches and for hard binding.

Who helped me finished this thesis.


This thesis in Economics contains about topics that I can be use as my future reference and may help me a lot to develop my personal skill in researching, writing, and etc.

All of those activities developed my skills in observing, being familiar into different economic crisis. All of this help me to become aware and involved in the things and happenings around me.

I give a very big thanks to our Adviser and Economics Teacher Mr. Adelio L. Glodoviza for teaching us facts about Economic Crisis that can help me in life. Also thanks to all my classmates and peers for giving me a moral support and most of all to our God Father and to my parents.


To know about how Philippines tackles high unemployment rate in economic crisis, what are the reasons of having unemployed people and what may be the right solutions to avoid that kind of problem. Unemployment exists because both jobs and workers are heterogeneous, and a mismatch can result between the characteristics of supply and demand. Such a mismatch can be related to skills, payment, work-time, location, seasonal industries, attitude, taste, and a multitude of other factors. New entrants (such as graduating students) and re-entrants (such as former homemakers) can also suffer a spell of frictional unemployment. Workers as well as employers accept a certain level of imperfection, risk or compromise, but usually not right away, they will invest some time and effort to find a better match. This is in fact beneficial to the economy since it results in a better allocation of resources. However, if the research takes too long and mismatches are too frequent, the economy suffers, since some work will not get done. Therefore, governments will always seek ways to reduce unnecessary frictional unemployment through multiple means including providing education, advice, training and assistance such as daycare centers.

The frictions in the labor markets are sometimes illustrated graphically with a Beveridge curve, a downward-sloping, convex curve that shows a correlation between the unemployment rate on one axis and the vacancy rate on the other. Changes in the supply of our demand for labor cause movements along the curve. An increase (decrease) in labor market frictions will shift the curve outwards (inwards).

Hidden or covered, unemployment is the unemployment of potential workers that is not reflected in official unemployment statistics, due to the way the statistics are collected. In many countries only those who have no work but are actively looking for work (and/or qualifying for social security benefits) are counted as unemployed. Those who have given up looking for work (and sometimes those who are on government “retraining” programs) are not officially counted among the unemployed, even though they are not employed. The same applies to those who have taken early retirement to avoid being laid off, but would prefer to be working. The statistic also does not count the “underemployed” – those with part time or seasonal jobs who would rather have full-time education are usually not considered unemployed in government statistics. Because of hidden unemployment, official statistics often underestimate unemployment rates.


The Philippines has one of the highest unemployment levels in Southeast Asia, standing at 6.8 percent as of October 2008, according to the country’s National Statistics Office (NSO).

The global economic turmoil has dampened demand in Japan, the United States and Western Europe – large markets for Philippine export goods, services and migrant workers. As these markets contracted, so did the demand for Philippine labor.

“Workers will always be the victims in recession,” said Father Edwin Corros, executive secretary of the Catholic Bishops Conference of the Philippines’ Episcopal Commission on Migrants and Itinerants.

“When there’s no demand for your products, how can you continue to hire people to make your products?” said Rene Cristobal, vice-president of the Employers Confederation of the Philippines, Inc. (ECOP). Cristobal said several of ECOP’s member-companies have to lay off workers as they either close shops or reduce their output.

Analysis said the most vulnerable workers are those in the export-oriented industries such as electronics and textile manufacturing. “The recession in our trading partners has hit our export sector hard,” said Philippine Socio-Economic Planning Secretary Ralph Recto. Philippine economic planners expect export receipts to fall this year and this doesn’t bode well for workers, especially for those employed in labor-intensive manufacturing companies.

Indeed, several companies reported either laying off workers or cutting working hours as the crisis reduced demand for Philippine exports.

In Luzon, northern Philippines, Intel Corp., the first US semiconductor firm that established a facility in the Philippines, shut down its factory and retrenched 1,800 workers. In Cebu, southern Philippines, furniture maker and exporter Giardini del Sole Inc. has temporarily shut down and laid off about 250 workers as a result of the financial crisis.

The Philippine Labor Department reported that 40,000 workers were retrenched, 33,000 workers are experiencing shorter working hours while over 5,400 overseas Filipino workers were displaced because of the crisis.

Dennis Arroyo, director of national planning and policy of the National Economic and Development Authority, forecast that as much as 200,000 workers may be laid off as the crisis continues to hurt the local economy.

However, the director doesn’t expect the unemployment level to hit double-digit levels which were recorded several years ago. In a paper issued at last month, Josef T. Yap, president of the Philippine Institute for Development Studies, expect unemployment levels to stay at current levels.

“Assuming that the economy will not decelerate further in 2009, there is reason to be cautiously optimistic that the unemployment rate will not rise beyond 6.8 percent in the next few months,” he said

Recto conceded the crisis will pressure the employment situations, but he believed that the strong macroeconomic fundamentals combined with the 330 billion peso (about 6.84 billion US dollars) stimulus package will cap the growth in unemployment rate.

For this year, despite the global recession, the Philippine GDP is expected to expand at 3.7 percent to 4.4 percent. Recto said the easing of the inflation (estimated to hit 3.9 percent this year’s 9.3 percent) will boost consumption and keep the economy afloat. The stimulus package – the bulk of which will be used to build infrastructures – will create 800,000 new jobs.

Luz Lorenzo, regional economist of the ATR Kim Eng Securities, agrees that the consumption driving Philippine economy will be resilient this year. But such economic growth, she said, is not high enough to absorb the burgeoning labor force.

“The economy will not fall in the deep end. But neither will it be a bed of roses. Unemployment will remain problem,” she said. Migration: by need not by choice.

The lack of opportunities in the Philippines will force most Filipino to seek greener pastures abroad. Every year, around one million Filipinos go overseas, mostly forced to leave their families to provide them with a better life.

Father Corros said most of the retrenched migrant workers that the Episcopal Commission on Migrants and Itinerants has been assisting in the past few months still prefer to work overseas instead of just staying in their own country.

“Migrating is the only option for them because they can’t find jobs here,” he said, adding that “we go back to the same problem. They go abroad because it’s difficult to look for jobs here.”

The Philippines is one of the world’s biggest labor exporters, with 10 percent of its over 80 million population living abroad. Migration has long been part of the Philippine government’s strategy to solve the unemployment problem.

This policy started in 1970s when then Philippine President Ferdinand Marcos, faced with huge levels of foreign debt and the oil crisis, sent construction workers to the Middle East. This was done to rein in the rising unemployment levels and avoid growing social unrest. Thirty years later, Filipinos continue to leave in droves – working as entertainers, domestic helpers, nurses, caregivers, seafarers and programmers.

The global crisis may have slowed businesses and even retrenched more than 5,000 Filipino migrant workers but analysts and government officials believed that there will be demand for Philippine labor abroad.

Philippine former President Gloria Macapagal Arroyo directed the Philippine Overseas Employment Administration to aggressively market Filipino labor and expertise abroad.

This kind of policy has long been criticized by migrant rights advocates, explaining that migration, although it brought in the much needed remittances, also cause social problems. Numerous migrant workers have been physically and sexually abused and have to endure exploitive working conditions.

The separation also breaks family ties and hurt the children who were left behind by their parents. What is needed, they said, is for the government to develop an economy that will provide decent jobs and will make migration a choice, not a necessity, for most of the country’s labor force.

The current global economic crisis, however, doesn’t offer such options. The country’s economic managers said one of the factors that will support the consumption-driven economy is the steady inflow of remittances. Labor deployment will therefore remain a key government policy.

“We see a steady labor demand in the Middle East, Australia and elsewhere which are responding to the crisis by embarking on the infrastructure projects with their stimulus packages,” Recto said in the last week’s economic briefing.

Analysts said the most Filipinos in the United States – one of the top destination countries for Filipino migrants – will keep their jobs as they’re usually employed in the recession-proof healthcare sectors. Industrialized economies with aging population will continue to seek cheap, English-proficient and skilled nurses and caregivers from countries like the Philippines.

The Philippines is one of the world’s biggest exporters of health care workers. Every year, over 8,000 Filipino nurses and 14,000 caregivers were deployed. Outsourcing industry offers new jobs.

There are some bright spots in the domestic labor market. The business process outsourcing (BPO) industry is expected to remain bullish. BPO revenues are forecasted to grow by 20 percent to 30 percent this year and companies expected to hire 100,000 new workers.

“A lot of companies are under a lot of pressure to cut so I think it will accelerate outsourcing,” said Alfredo Ayala, CEO of Live It Solutions, Inc., the holding company for Ayala Corporation’s investments in business process outsourcing.

Call centers will remain the biggest revenue earner and employer in the BPO sector. But BPO executives believe that the growing demand for the high-value- voice outsourcing sectors such as animation, software development and back office will offer opportunities to the country’s programmers, graphic designers and accountants.

“Right now, we’re really leading in the contact center sector. But now we’re trying to change that. We’re trying to expand to the higher value non-voice services,” said ma. Cristina Coronel, president of the Philippine Software Industry Association.

Job openings, however, will not necessarily translate into full-time employment. BPOs offer a lot of perks and benefits to its employees but very few are qualified to work in the industry. To solve this problem, BPOs are offering workshops and scholarships to expand its talent pool.

Dennis Posadas, deputy executive director of the Philippine Congressional Commission on Science, Technology and Engineering, said that as far as outsourcing in the information technology sector is concerned, very few are qualified to take the jobs because many are not adequately trained. “We still need to improve basic education in our public schools. They need to emphasize on science and math education,” he said.

Inflation and unemployment go hand in hand. For ever country, maintaining a low unemployment rate is the main objective. It is usually believed that inflation and unemployment are inversely proportional. There are many economists, who hold the opinion that low rate of unemployment together with low inflation rate may be source of concern. Both low inflation rate and low unemployment rate, may be hypothetical. In real rate of unemployment, if a nation maintains a minimum rate of unemployment in a condition when inflation rate is stable, it is said to follow the natural rate of unemployment. In other words, the natural rate of unemployment is the minimum rate of unemployment, which can be sustained.

Inflation and unemployment go hand in hand. For every country, maintaining a low unemployment rate is the main objective. It is usually believed that inflation and unemployment are inversely proportional. There are many economists, who hold the opinion that low rate of unemployment together with low inflation rate may be a source of concern. Both low inflation rate and low unemployment rate, may be hypothetical. In real practice, this rarely happens. If a particular country has full employment, it can be said to have minimum rate of unemployment. If a nation maintains a minimum rate of unemployment in a condition when inflation rate is stable, it is said to follow the natural rate of unemployment. In other words, the natural rate of unemployment is the minimum rate of unemployment, which can be sustained. If rate of inflation increases suddenly, it temporarily reduces, the rate of increase in the wages. Consequently, unemployment rate decreases. If the workers are able to cope with the increase in inflation, unemployment rate is also less. However, when they do realize that in order to compensate for the increase in price of commodities, the wages ought to be increased, unemployment may rise to a considerable extent. This increase in the demand of wages, has a tendency to reverse the unemployment curve to some extent (unemployment rises). If the rate of inflation is very high, it does not mean that, there will be a permanent decrease in the rate of unemployment. As a rule, rate of inflation and unemployment adjust themselves to attain the equilibrium state, which is known as the natural rate of unemployment state, effortlessly. It just happens.

The Philips Curve:

The Philips Curve, as the name suggests is named after the William Philips, who was a famous economist. He suggested the relationship between inflation and unemployment. The Philips curve shows how inflation and unemployment are related. He suggested that if rate of inflation is high, rate of unemployment is low. On the other hand, if the rate of inflation is low, unemployment rate is high.

Lack of effective aggregate demand of labor is one of the principal reasons for unemployment. In the less developed economies a substantial portion of the total workforce works as surplus labor. This problem is particularly prevalent in the agricultural sector. Due to excess labor, the marginal productivity of the workforce may be zero or even negative. This excess pool of labor is the first to become unemployed during the period of economic or social crisis.

Unemployment and poverty are the two major challenges that are facing the world economy at present. Unemployment leads to financial crisis and reduces the overall purchasing capacity of a nation. This in turn results in poverty followed by increasing burden of debt. Now, poverty can be described in several ways. As per the World Bank definition, poverty implies a financial condition where people are unable to maintain the minimum standard of living.

Poverty can be of different types like absolute poverty and relative poverty. There may be many other classifications like urban poverty, rural poverty, primary poverty, secondary poverty and many more. Whatever be the type of poverty, the basic reason has always been lack of adequate income. Here comes the role of unemployment behind poverty. Lack of employment opportunities and the consequential income disparity bring about mass poverty in most of the developing and under developed economies of the world.

Economic reforms, changes in the industrial policy and better utilization of available resources are expected to reduce the problem of unemployment and poverty that results from it. The economic reform measures need to have major impacts on the employment generating potential of the economy. The governmental bodies are also required to initiate long term measures for poverty alleviation. Generation of employment opportunities and equality in income distribution are the two key factors that are of utmost importance to deal with the dual problem of unemployment and poverty. The jobs crisis isn't going anywhere, according to the latest forecast from the nonpartisan Congressional Budget Office, which puts the national unemployment rate above 9 percent through 2011 and 8 percent through 2012.

Unemployment will fall to a more "natural rate" only in 2016, when CBO estimates it will reach 5.3 percent -- a projection roughly in line with private-sector figures.

"The recovery in employment has been slowed not only by the moderate growth in output in the past year and a half but also by structural changes in the labor market, such as a mismatch between the requirements of available jobs and the skills of job seekers, that have hindered the reemployment of workers who have lost their job," CBO's report says.

The degree to which the unemployment crisis is structural, as opposed to cyclical, is hotly debated by economists, with progressives like Paul Krugman arguing that structural unemployment is a fake problem "which mainly serves as an excuse for not pursuing real solutions." Many argue that the even drop in employment across industries shows that lack of overall demand is the problem, with stimulus spending the answer. Others have said pay disparities between workers with different levels of education show the problem is at least partly structural.

James Galbraith, an economist who teaches at the University of Texas, says CBO's structural unemployment claim is an after-the-fact rationalization for previous failed forecasts. (CBO's 2009 forecast predicted 8 percent unemployment in 2011 and 6.8 percent unemployment in 2012. Galbraith's been beating up on CBO since before then.)

"There never was any reason to believe that employment would bounce back, as CBO had previously forecast, in the wake of the financial meltdown, and no reason now to think that the problem lies with deficient skills for any class of workers," Galbraith told HuffPost. "[The CBO forecast] is a purely mechanical exercise idea based on the fact that in the past we've always rebounded to a natural unemployment rate of 5 percent. What that means is you never take into account that the system broke in any serious way."

The most unusual factor of the jobs crisis is how long some people are going without work. Long-term unemployment has surged since the unprecedented mortgage meltdown that clobbered housing prices and launched the Great Recession in December 2007. Some 6.4 million people -- 44.3 percent of the 14.5 million unemployed -- have been out of work for six months or longer, and 1.4 million have been out of work for two years or longer. This is the worst long-term unemployment situation in the United States since the Great Depression.

CBO's report says the long-term unemployed lose familiarity with developing technologies as their job-finding social networks deteriorate, but it hints at another reason those folks can't find jobs: Employers don't want them because nobody else does. The Congressional Research Service says the 1.4 million "very long-term unemployed" hail from all educational backgrounds.

"Workers who are unemployed for long periods may face even greater obstacles in finding a new job," the CBO report says. "Some employers may assume that long-term unemployment is a signal that a worker is not good at his or her job."

Indeed. Just check out this Craigslist ad for a restaurant manager in Salisbury, Md.: "Must be currently employed or recently unemployed."

As HuffPost has reported, this is a common requirement for many jobs, even if it sometimes goes unstated.

* The global unemployment rate rose to 6.6 percent in 2009, an increase of 0.9 percentage points over 2007. However, it varied widely by region, ranging from 4.4 per cent in East Asia to more than 10 per cent in Central and South-Eastern Europe (non-EU) and Commonwealth of Independent States (CSEE & CIS) as well as in North Africa; * The global youth unemployment rate rose by 1.6 percentage points to reach 13.4 per cent in 2009 relative to 2007. This represents the largest increase since at least 1991, the earliest year for which global estimates are available; * The overall impact of the economic crisis on women and men is far more important than the differences in impact between these groups; * Preliminary estimates of growth in labour productivity, measured as output per worker, indicate that productivity levels fell in all regions except East Asia, South Asia and North Africa. The largest decline in output per worker occurred in Central and South-Eastern Europe (non- EU) & CIS, - 4.7 per cent, thus reversing part of the gains that were made in the first half of the decade; and * As a result of declining output per worker, working conditions are deteriorating especially in regions where labour productivity was already low preceding the economic crisis, such as in Sub-Saharan Africa.

To address these issues, the ILO constituents (governments, workers and employers) which represent the “real economy” have agreed on a Global Jobs Pact in June 2009 that contains a balanced set of tried and tested measures to promote a robust response to the employment challenge. These focus on accelerated employment generation, sustainable social protection systems, respect for labour standards, and strengthening social dialogue. The Pact has received strong backing from the G20 heads of state and from the UN General Assembly. Rethinking financial and economic policies, with respect to their impact on employment and social protection is essential because we will not get out of the crisis by applying the same policies that led to the crisis in the first place.

The more probable cause of unemployment in the Philippines is the unavailability of  jobs provided. With a growing population of about a 8 million, millions needed jobs and only few can sure provide one. The lack of investors and businesses that could provide good jobs for the Filipino people is one key factor in the growing unemployment in the Philippines.

But probably; one cause of unemployment in the Philippines may be lack of education. With the increasing demands of the fast developing world, it is really hard to find jobs when you are not a graduate of a particular skill or course. Though the Philippines is a literate country, its not enough to be able to reach the qualifications of most in-demand jobs because even mere sales ladies nowadays are required to have at least 1-2 years in college. We are facing a competitive world and its a must to reach the norms of development. Thus, a high educational attainment, which most Filipinos lack, is one way to uplift the unemployment rate of the country. The unemployment rate remained at 9.1 percent for August. Unemployment to the mass media generally centers on that single point within the Bureau of Labor Statistics (BLS) monthly employment report. There is passing mention of discouraged workers and the underemployed, but the true scale of the jobs crisis is given scant attention considering the magnitude of the problem. What follows are 11 unemployment details that mass media underreports or ignores completely. This list will not be recalled fondly as a top-10 list of best quarterbacks or favorite vacation retreats would, but it’s where the REAL unemployment crisis is exposed. 1. The jobs deficit: That is the total number of jobs lost PLUS jobs that should have been created since the recession began in December 2007; as mentioned above, there are 6.9 million fewer jobs today than at the start of the Great Recession, but that tells only half the tale of the jobs deficit. There is also the matter of creating jobs to keep up with the increase in workforce population. Those new workers include high school and college graduates, and immigrants. The number of jobs that need to be created each month to accommodate new entrants into the workforce ranges from 120,000 - 150,000. Adding together the jobs lost since the recession and the new jobs needed for population growth, the total jobs deficit is estimated to be 11.3 million. A few tax breaks, some targeted workforce retraining and some regulatory relief for businesses are not going to be the forces behind the creation of more than 11 million jobs. A massive effort is required to fill that gaping jobs hole. 2. Filling the jobs deficit: According to  EPI: “To fill that gap in three years – by mid-2014—while still keeping up with the growth in the working-age population—would require adding around 400,000 jobs every single month. To fill the gap in five years—by mid-2016—would mean adding 280,000 jobs each month. By comparison, over the last three months, the economy added just 35,000 jobs, on average.” It’s striking that the economy has created only 105,000 jobs during the past three months. When considering only the new entrants to the workforce, such as recent college graduates, that three-month span produced a shortage of 270,000 or more jobs.   3. The Birth/Death Model: This is not births and deaths of people, but of businesses. The BLS estimates how many jobs were created or lost by business formations or closings.  In August, the BLS estimated that 87,000 jobs were created by new businesses.

Structural unemployment occurs when a labour market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of the unemployed workers and the skills needed for the available jobs. Structural unemployment is hard to separate empirically from frictional unemployment, except to say that it lasts longer. As with frictional unemployment, simple demand-side stimulus will not work to easily abolish this type of unemployment. Structural unemployment may also be encouraged to rise by persistent cyclical unemployment: if an economy suffers from long-lasting low aggregate demand, it means that many of the unemployed become disheartened, while their skills (including job-searching skills) become "rusty" and obsolete. Problems with debt may lead to homelessness and a fall into the vicious circle of poverty. This means that they may not fit the job vacancies that are created when the economy recovers. Some economists see this scenario as occurring under British Prime Minister Margaret Thatcher during the 1970s and 1980s. The implication is that sustained high demand may lower structural unemployment. This theory of persistence in structural unemployment has been referred to as an example of path dependence or "hysteresis". Much technological unemployment,[20] due to the replacement of workers by machines, might be counted as structural unemployment. Alternatively, technological unemployment might refer to the way in which steady increases in labour productivity mean that fewer workers are needed to produce the same level of output every year. The fact that aggregate demand can be raised to deal with this problem suggests that this problem is instead one of cyclical unemployment. As indicated by Okun's Law, the demand side must grow sufficiently quickly to absorb not only the growing labour force but also the workers made redundant by increased labour productivity. Seasonal unemployment may be seen as a kind of structural unemployment, since it is a type of unemployment that is linked to certain kinds of jobs (construction work, migratory farm work). The most-cited official unemployment measures erase this kind of unemployment from the statistics using "seasonal adjustment" techniques. The resulting in substantial, permanent structural unemployment.


Unemployment is recognized as one of the most challenging social problems currently facing Philippines. In the last two decades and more recently with the global recession high levels of unemployment have become an established feature of the Northern Philippines’ social and economic landscape, with young people aged 15 to 24 years among those hardest hit by unemployment.

In the past quarter the unemployment rate in country has remained steady at 5.6% (Philippine Bureau of Statistics, 2009) but this figure is volatile and may increase next month. The youth unemployment rate, however, in the country remains at 21.9% with the Western and Northern suburbs having significantly higher rates of 31.6% (Workforce Information Service).

People of all ages are affected by unemployment but young people aged 15 to 24 years are affected disproportionately. Youth unemployment in the Philippines is commensurate to the national average of 26.3%. The youth unemployment rate is now the highest it has been since November 2001(ABS, 2009).Given the country’s population growth and economic growth rates, high youth unemployment rates are likely to continue (Hugo, 1999). (

Employability for the Health Development Agency

The background and nature of those who are unemployed

(Especially the long term unemployed and those for whom a return or entry into the labour market is particularly difficult)

The ILO defines unemployment as “people without a job who were available to start work within two weeks and had either looked for work in the previous four weeks or were waiting to start a job they had already obtained”.

In March 2001 unemployment in the Philippines fell to below one million for the first time in twenty-five years, with 3.4% of the total working population being registered as unemployed.

However when overall unemployment is broken down into specific groups it is clear that, young people are much more likely to be unemployed than older people. In Spring 1999 for example, more than 21 % of 16 – 17 year old men and 14% of women were unemployed. Although the rates for 18 – 24 year olds were lower at 12.5% and 9.3% respectively, they were still almost double the rates for all people of working age. Youth unemployment can be due to a number of factors but is often associated with a lack of relevant skills, qualifications and experience.

This review has been undertaken against a background of low overall unemployment but with higher levels of unemployment in specific groups. For example, young people have higher levels of unemployment than older people and men are more likely to experience long-term unemployment than women. In addition the review identifies specific groups who face increased levels of difficulty when trying to re-enter employment. These groups include those with short-term disability and illness, both physical and psychological, single women with dependents, women in lower socio economic groups, young people, older workers, workers of ethnic origin and economic migrants.

* Health and employability
* Gender and employability
* Age and employability
* Social networks and social support mechanisms * Ethnicity * Return to work following illness, injury or childbirth * Training and employability


Youth unemployment: a review of the literature.

This paper sets out to review the studies on youth unemployment conducted in a range of English speaking countries: America, Australia and Great Britain. The studies have been divided into six sections: psychological adjustment, attributions and expectations, education about unemployment, job choice and work experience, values, and job interview training. The paucity of good studies in this area partly explains the lack of clear replicated findings or coherent theories for the causes, correlates and consequences of unemployment among young people, though this is an area of relevance to social policy. Furthermore, it was concluded that various factors such as individual differences, salient demographic variables and previous work experience have been neglected. Nevertheless, many of the studies seem to indicate the presence of a destructive vicious circle which young people experience when failing to get a job: stress and disappointment, leading to lowered self-esteem, a change in expectations, and minor psychiatric illnesses which handicap the job search and application process so making unemployment all the more likely. (


Unemployment a Time Bomb

The principal macroeconomic goals of every working society are to create conditions of full employment, reduce poverty and promote policies that can create wealth. This is not quite so in economies that is lagging in all growth indicia. On the contrary, the economies of the Less Developed Countries are characterized by unemployment – mostly of the structural, frictional and residual typologies. The under-employment index is unimaginably high. However, unemployment has become a global phenomenon, with the Less Developed Countries hard hit. The economies are characterized by unemployment. The rate of unemployment is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labour force. In a 2011 news story, Business Week reported, "More than 200 million people globally are out of work, a record high, as almost two-thirds of advanced economies and half of developing countries are experiencing a go-slow in employment growth, the group said”.

Keynesianism holds the view that government should intervene to increase demand for workers; these can include financial stimuli, publicly funded job creation, and expansionist monetary policies. Marxism focuses on the relations between the owners and the workers, whom, it claims, the owners pit against one another in a constant struggle for jobs and higher wages.

According to Karl Marx, unemployment is inherent within the unstable capitalist system and periodic crises of mass unemployment are to be expected. The function of the proletariat within the capitalist system is to provide a "reserve army of labour" that creates downward pressure on wages. This is accomplished by dividing the proletariat into surplus labour (employees) and under-employment (unemployed). These reserve armies of labourers fight for the scarce jobs at lower and lower wages. Marxism advocates that the only way to permanently eliminate unemployment would be to abolish capitalism and the system of forced competition for wages and then shift to a socialist or communist economic system.

In fact, employment is a welfare right of every individual in any democratic society. The General Conference of the International Labour Organization, ILO, in June 1934 recommended that in countries where compulsory insurance against unemployment is not in operation, steps should be taken to create such a system as soon as possible. Again, in countries where compulsory or voluntary unemployment insurance is in operation, a complementary assistance scheme should be maintained to cover persons who have exhausted their right to benefit.


These definitions of terms are used in an operational way:

ILO is the international organization responsible for drawing up and overseeing international labour standards. It is the only 'tripartite' United Nations agency that brings together representatives of governments, employers and workers to jointly shape policies and programs promoting Decent Work for all.

Labor force participation rate
[Total number of persons in the labor force / total population 15 years old and over] x 100%

Employed: include all those who, during the reference period are 15 years old and over as of their last birthday and are reported either: * At work. Those who do any work even for one hour during the reference period for pay or profit, or work without pay on the farm or business enterprise operated by a member of the same household related by blood, marriage or adoption; or * With a job but not at work. Those who have a job or business but are not at work because of temporary illness/injury, vacation or other reasons. Likewise, persons who expect to report for work or to start operation of a farm or business enterprise within two weeks from the date of the enumerator’s visit are considered employed.

Employment rate
[Total number of employed persons / total number of persons in the labor force] x 100%

Unemployed (ILO definition): include all those who, during the reference period are 15 years old and over as of their last birthday, are: * without work, or had no job/business during the basic survey reference period; AND * seeking work, i.e., had taken specific steps to look for a job or establish business during the basic survey reference period; OR not seeking work due to the following reasons: * believe no work available

* awaiting results of previous job application;
* temporary illness/disability;
* bad weather; and
* waiting for rehire/job recall
* AND currently available for work, i.e., were available and willing to take up work in paid employment or self-employment during the basic survey reference period, and/or would be available and willing to take up work in paid employment or self-employment within two weeks after the interview date

Unemployment rate:
[Total number of unemployed persons / total number of persons in the labor force] x 100%

Underemployed: include all employed persons who express the desire to have additional hours of work in their present job or an additional job, or to have a new job with longer working hours.

Underemployment rate:
[Total number of underemployed persons / total number of employed persons] x 100%

The current definition of "unemployed" is based on the International Labor Organization (ILO) concept.

Adopted by the National Statistics Office in April 2005, the ILO concept sets three criteria in order for a person 15 years old or older to be considered as unemployed. He or she must be 1. without work, AND

2. is actively seeking work OR not seeking work due to valid reasons, AND 3. currently available for work.
The old Philippine definition of "unemployed" considered only the first two criteria.

Under the new definition (ILO concept), people unavailable for work, or are available for work but are not looking for work, are not part of the labor force and are not considered as unemployed.


* “The World” Structural unemployment crisis stalking U.S. economy”.Reuters.October 6, 2009 * Rifkin 1995.
* Ford 2009.
* d Factbook”.
* “International Labour Organization: Resolution concerning statistics of the economically active population, employment, unemployment and underemployment, adopted by the Thirteenth International Conference of Labour Statisticians(October 1982); see page 4; accessed November 26, 2007” (PDF). * “World Employment May Not Reach Pre-Crisis Level for Five Years”. Businessweek. October31,2011. * George, Henry. Progress and Poverty 1879.

* “Sturdy Beggars”. Retrieved 2009-07-22. * “Poor Tudors” Retrieved 2009-07-22. * R.O. Bucholz, Newton Key, Early modern England, 1485-1714, p176 * “History of Death Penalty”. Public Broadcasting Services (PBS). * “Poverty in Elizabethan England”. BBC – History.

* “Social Classes in Shakespeare’s England”
* “British social policy, 1601-1948”, The Robert Gordon University, Aberdeen. * Jackson J. Spielgovel (2008). “Western Civilization: Since 1500”. Cengage Learning. p.566.ISBN 0495502871 * Engels, Frederick (1892). The Condition of the Working-Class in England in 1844. London: Swan Sonnenschein & Co. pp. 45, 48-53.Link is to excerpt. * Roe, Joseph Wickham (1916). English and American Tool Builders, New Haven, Connecticut: Yale University Press, LCCN 16-011753. Reprinted by McGraw-Hill, New York and London, 1926 (LCCN 27-024075); and by Lindsay Publication, Inc., Bradley, Illinois, (ISBN 978-0-917914-73-7). Report of the British Commissioners to the New York Industrial Exhibition, London 1854 * Wells, David A. (1891). Recent Economic Changers and Their Effect on Production and Distribution of Wealth and Well-Being of Society. New York: D. Appleton and Co..ISBN 0543724743. * Jerome, Harry (1934). Mechanization in Industry, National Bureau of Economic Research.



16 - 20 years ( )Roman Catholic( )
21 - 25 years ( )Iglesia ni Kristo( )
26 - 30 years ( )Jehovah Witness( )
31 - 35 years ( )Muslim( )
Born Again( )
Other Specify:( )


Female ( )Elementary Graduate( )
Male ( )High School Graduate( )
College Graduate( )
Elementary Undergraduate( )
NATIONALITYHigh School Undergraduate( )College Undergraduate( )
Filipino ( )
American ( )
Other Specify: ( )


Single ( )
Married ( )
Widow ( )
Widower ( )


1. Do unemployed people affect the image of our society?Yes ( ) No ( ) 2. Do we have a right o complain to our government?Yes ( ) No ( ) 3. Does unemployment rate affect you as individual?Yes ( ) No ( ) 4. Do we need to know how to avoid high unemployment rate?Yes ( ) No ( ) 5. Do government officials give more attention about it?Yes ( ) No ( ) 6. Is it necessary to expect to us in our society?Yes ( ) No ( ) 7. Did the government do work about it?Yes ( ) No ( ) 8. Do you believe that this situation affect to our country?Yes ( ) No ( ) 9. Do you use your own skills to prevent unemployment?Yes ( ) No ( ) 10. Do you think our country is one of the most high unemployment rates?Yes ( ) No ( ) 11. Do you think ourselves do an action in our own way?Yes ( ) No ( ) 12. Did we need to know all about the unemployment problem?Yes ( ) No ( ) 13. Is there any law that unemployed people need to follow?Yes ( ) No ( ) 14. Is there any law that employed people need to follow?Yes ( ) No ( ) 15. Are there any same laws that need to follow by employed andYes ( ) No ( ) unemployed need to follow?

16. Does unemployment rate increases?Yes ( ) No ( ) 17. Does unemployment rate decreases?Yes ( ) No ( ) 18. Did we have the power or skills in how to avoid unemployment rate?Yes ( ) No ( ) 19. Is there any offer from the government for the unemployed people?Yes ( ) No ( ) 20. Do we need to complain this situation to our president?Yes ( ) No ( )


Unemployment (or joblessness), as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. In a 2011 news story, BusinessWeek reported, “More than 200 million people globally are out of work, a record high, as almost two-thirds of advanced economies and half of developing countries are experiencing a slowdown in employment growth, the group said.”

There remains considerable theoretical debate regarding the causes, consequences and solutions for unemployment. Classical economics, new classical economics, and the Austrian School of economics argue that market mechanisms are reliable means of resolving unemployment. These theories argue against interventions imposed on the labor market from the outside, such as unionization, minimum wage laws, taxes, and other regulations that they claim discourage the hiring of workers. Keynesian economics emphasizes the cyclical nature of unemployment and recommends interventions it claims will reduce unemployment during recessions. This theory focuses on recurrent shocks that suddenly reduce aggregate demand for goods and services and thus reduce demand for workers. Keynesian models recommend government interventions designed to increase demand for workers; these can include financial stimuli, publicly funded job creation, and expansionist monetary policies.

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