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Underemployment woes

The Philippine Statistics Authority reported the country’s labor situation to have reached a plateau with the unemployment rate unchanged at 7.7 percent for June.

The stagnant unemployment rate was observed even as restrictions were lowered in June, indicating that reopening the economy does not necessarily solve the country’s labor market woes. The June figures accounts for 3.76 million unemployed Filipinos in the labor force. Furthermore, an additional 30,000 Filipinos were added to those jobless from the 3.73 million in May.

More worrying than unemployment is the underemployment rate or the proportion of workers looking for more hours of work, which went up to 14.2 percent in June from 12.3 percent in May. Nearly one million more Filipinos failed to get enough work hours to earn adequate incomes.

Leonardo Lanzona, labor economist and professor at the Ateneo de Manila University, said the increase in underemployment clearly shows that the jobs created during the period are low paying and of poor quality. “Unemployment may have remained stable, but people are taking on jobs that they would not normally accept. As indicated in the underemployment figures, these are not enough to keep them afloat,” he noted.

Lanzona adds that the fragile labor market situation is bound to worsen with the upcoming two-week lockdown starting Friday. “If income and health security, through cash transfers and health programs, meaning paid leaves, is not given, the lockdown can prove to be ineffective as people will continue to search for work despite the heightened risks.”

The various states of quarantine restrictions Filipinos have been subjected to over the past 16 months has significantly affected the labor market and the capacity to earn and make a decent living. While unemployment rates seem to be under control, the problem of underemployment has been growing, affecting the lives of millions of workers who somehow remain employed but no longer earn a living wage.

The next few weeks of heightened restrictions and even new lockdowns are necessary as the country battles the Delta variant of Covid-19 but these drastic actions need to be supported by even more determined efforts to normalize the situation and support the affected while the economy and the capacity of the labor market is eventually restored. The Filipino people who have been enduring more than 500 days of quarantine restrictions need their government to respond to the pandemic with more creativity and urgency.*

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