Fine Print: April 2007 Labor Force Statistics

Good news

Assuming that the preliminary figures of the April 2007 Labor Force survey remain essentially the same, the administration has something to be glad and crow about. 

 

Consider these:

1.  Employment increased by over a million (1.007) in April 2007 compared to April 2006.

2.  Those who were employed but sought more hours of work to earn more income (the underemployed) decreased by almost 2 million (1.928) over the same period.

The number of visibly underemployed workers (those who were working less than 40 hours a week) fell by almost 2/3 of a million (669 thousand).  The number of invisibly underemployed (those who were working 40 hours or more but still needed to earn income) decreased even more (1.258 million).

The decrease in the number of the underemployed workers was most significant in the aggregate services sector (1.152 million).  Also, on aggregate, there were similar decreases in agriculture (358 thousand) and industry (418 thousand).

One can surmise that generally during this period, workers either found more hours of work or earned more income or both.

3.  The unemployed (those who looked and were available for work but did not find any) decreased by about a quarter of a million (0.244) over the same period.

Note that in the past survey rounds the April unemployment rates would always be the highest for the year that this did not cause too much alarm nor surprise among the economic managers.  They would attribute this mainly to the entry of thousands of graduates into the labor force. 

But this is not the case this time.  The age group 15-24 years old, which has been half of all unemployed, had the biggest decrease in unemployment.  All the other age groups also had decreases in unemployment.   

So, assuming again that the final figures will be essentially be the same as the preliminary ones, this decrease in unemployment would be a significant achievement and sound response to the policies of the administration.  However this is an observation that cannot be established because a long time series data using the new (ILO) concept is not available.

Also, note that the period of the survey coincided with the first week of campaign for the local elections.  Thus the administration needs to be cautious in claiming credit for this development unless it did pour money for the campaign in general or a slate in particular.

Good news? 

4.  The 1 million gain in employment can be broken down into:

  • More than half came from agriculture, fishery and forestry.

Agriculture, hunting and forestry – 438 thousand.

Fishing – 106 thousand.

  • The increase in services might be partly attributed to affluence from abroad (OFW families affording paid household help) and/or election campaign mobilization. 

Private households with employed persons – 147 thousand.

Other community, social and personal services activities – 94 thousand.

  • …and partly to the continuing expansion in call centers and related business process outsourcing activities might be the other cause 

Real estate, renting, business services – 131 thousand.

Transport, storage and communications – 77 thousand.

  • Seasonally this is the peak period for construction activities but the gain is significant from past experience.   This could be due to election spending, or the tail-end of it, and/or the affluence from abroad supporting the increased real estate transactions.

Construction – 121 thousand.

 

5.  The sector that suffered most was manufacturing, which lost 117 thousand.  Hotels and restaurants had 39 thousand less. 

6.  The reported gains in employment were mixed by class of worker.  The wage and salary workers in private establishments (presumably in services and construction) increased by 678 thousand.  Private households took in 147 thousand workers.  The unpaid family workers increased likewise, by 524 thousand (presumably in agriculture and/or services).   However, own-account workers fell by 195 thousand.  Workers with pay in family-owned businesses also fell by 29 thousand.  Considering the drop in manufacturing and hotels and restaurants, one can surmise that the small and medium enterprises (SMEs) might have had a difficult time during this period and laid off workers and/or closed shop.

 
7.  Over the years, the gain in employment has been tagged in media or everyday language as increases in jobs.  However it should be clarified that included in this count are those who work less than 40 hours a week, estimated at about 42 percent.  At least 15 percent work less than 20 hours a week and another 14 percent work less than 30 hours a week.  But their numbers were less seven years back.  In April 2000, those working less than 40 hours were 32.9 percent of total compared to 41.8 percent in 2007.  Those working 40 hours or more were 65.3 percent then compared to 55.5 percent in 2007.  The administration has created more work for the labor force, – part-time work. 

8.  Note that the labor force participation rate is less than 2/3 of the population aged 15 years old and over.  One would find that among those outside the labor force the housewives, retirees, those in school, and those who postpone looking for jobs.  Sometimes the economic outlook portrayed by government can be so positive that many belonging to these ‘outsiders’ may choose to re-enter the market and look for work.  If there are not enough work opportunities for these ‘outsiders’, the unemployment rate may rise again, even under the situation of a ‘booming’ economy.        

9.  It is still too early to claim sound policy fundamentals in the labor market, more especially considering the large and growing population of 15 years old and over wating to re-enter the labor force.

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Filed under labor force, Philippines, statistics

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