Our educated jobless
Would our young people still go to college if they knew they are less likely to find a job than if they took a technical-vocational course, or even stopped at high school? This is what recent jobs data from the Labor Force Survey of the Philippine Statistics Authority (PSA) actually suggest.
Let’s start with the good news, bannered by an Inquirer story last Friday: “PH unemployment rate hit record-low 3.8% in ’24.” The PSA reported our unemployment rate last December to have dropped to a record low of 3.1 percent, ending the year with a 3.8-percent annual average—also the lowest annual average unemployment on record. Against other countries, neighbors like Thailand, Malaysia, Singapore, and Vietnam are still better off with a lower unemployment rate. But we’re better than China (with 5 percent), India (7-8 percent), the United States and Australia (4 percent), European countries like France and Germany (up to 7.5 percent), and Latin American economies like Brazil and Argentina (7-8 percent). The overall job picture is thus something to be pleased about. But a closer look at the data reveals cracks that need fixing, and it’s not going to be easy or quick, as these call for structural changes in our economy.
Following are some highlights of labor market developments over the past five years, since January 2020 or just before COVID-19 struck.
Over 7.6 million net new jobs have arisen since five years ago, or an average of 1.5 million additional jobs per year. About 1.3 million new working-age (15-year-old) Filipinos are added to the population every year. This implies that job growth has more than caught up with the number who can take on those jobs—and note that the bulk of those 15-year-olds would not actually be looking for jobs and be counted in the labor force because they are in school. Hence, our jobless count dropped from 2.4 million in January 2020 to only 1.6 million now; the unemployment rate fell from 5.3 to only 3.1 percent now. This would have generally translated to reduced poverty as well.
Over two-thirds of the new jobs generated are in the services sector (5.3 out of 7.6 million). Agriculture and industry added just a little over a million new jobs each. Most (3.2 million) of those new services sector jobs were “service and sales workers”—vendors, store sales clerks, and all sorts of sales agents, along with repairmen, salon and spa workers, and other personal services. Most are likely to be in the informal sector or “underground economy,” and are not necessarily the kinds of jobs we would welcome.
The bulk of the new jobs created are wage and salary jobs (5.9 out of the 7.6 million net new jobs, or 78 percent), as against self-employed or unpaid family work. The share of wage and salary workers to total workers also rose from 65.2 to 67.1 percent. This is good news, as wage and salary-paying jobs are likely of better quality than those of the individually self-employed, who increased by 1.7 million. It is also good news that the number of unpaid family workers significantly declined by 314,000.
Micro, small, and medium enterprises (MSMEs) have increased by 319,000 since 2020, reflected in the increase in “employers in own family farm or business.” This is less than ideal because entrepreneurship could arguably be superior to wage employment, as it is about creating jobs, rather than merely finding a job. Fostering far more MSMEs is critical if we want inclusive economic growth, so small businesses could contribute a greater part of our national income and employment, thereby achieve more broad-based development.
We’ve made progress in reducing youth unemployment with the overall fall in jobless workers. The total number of unemployed dropped from 2.39 million in 2020 to 1.63 million now, or a decline of 761,000 jobless. The bulk or 82 percent of the reduction (numbering 621,000 workers) was for young workers between 15 and 34 years old. But there was a rise in joblessness for those 55 to 64 years old (up by 23,000 workers), reflecting a problem of greater joblessness among those more experienced.
Perhaps most disturbing is the rise in joblessness among those with a college education. In 2020, 36.9 percent of our jobless had a college education, with 26.9 percent actually having completed college. These numbers have swelled to 44.1 and 35.6 percent, respectively. Now, 15.6 percent had senior high school, 27.5 percent junior high school, 6.3 percent elementary, and only 6 percent had technical-vocational education. College graduates now account for the single largest segment of our unemployed by education status, whereas high school graduates dominated it five years ago. This is symptomatic of a weakening economy in dire need of a big boost in investments that create higher-level jobs. This is where we ought to focus our investment promotion efforts now.
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