COVID-19, unemployment, and positive government responses
Other than health, labor and employment are the areas of our lives hardest hit by COVID-19 and the quarantine (ECQ) it demands. Unfortunately, our most recent statistics do not yet reflect the actual employment realities, but they cannot but be grim.
Before COVID-19 hit us, the January, 2020, statistics showed that we had a 15-year-old-andover population of 72,997,000, of whom 61,700,000 were employed. Our unemployment rate was 5.3%, a record within the immediate past ranges.
What will happen when the full blast of COVID-19 hits us is not difficult to figure out.
With communities under lockdown, the actual extent may not yet fully register in the 2nd quarter 2020 statistics because of the prevailing work-from-home arrangements. But soon enough, businesses – particularly the small and medium – may have to reduce their workforce or close their doors for sheer lack of business under lockdown conditions. Due to lack of meaningful opportunities, job seekers cannot likewise move.
Even if the ECQ is partially lifted or relaxed, the move will not directly and immediately normalize business operations. The relaxation may in fact be very gradual to keep COVID19 infections (currently beyond the 10,000 mark) continually in check.
A distinct possibility is the continuation of the ECQ regime in the meantime that no discernible flattening of the curve has been established. UP professors have estimated that COVID-19 infections could spike to 24,000 (from its 10,000 level) if an immediate relaxation of the ECQ is made. This spike could “squander the gains” so far made. Other academicians agree with these conclusions.
The loss of the initial gains is not insignificant under our present infection levels if only because higher levels could stretch our health system to its breaking point. Medical frontliners have not only been dying; after 3 ½ months of fighting COVID-19, the remaining ones are exhausted or are nearing exhaustion.
With a population density of 70,000 per square kilometer for Manila, the UP estimate is far from remote. The spread of COVID-19 could perhaps even be higher if COVID-19 will massively hit Manila’s densely populated areas.
The tension under these realities is: Between lives and livelihood, which should the government prioritize?
To continue with the January statistics, they already show that while unemployment is at 5.3%, underemployment rate is at 14.5%.
Secretary Pernia of the NEDA, before his resignation, estimated that the unemployment percentage could rise to double-digit if a recession results from the lockdown. Presumably, the underemployment figures – or those who are employed but who wish additional employment to satisfy their needs – cannot then be far behind. The ranks of both the unemployed and the underemployed will surely increase as this year’s new graduates are added.
Even without a recession, consider further that the hardest hit would include a cross-section of our business community, among them, those in accommodation (such as hotels), food services (restaurants, canteens), manufacturing (across industries), retail (such as mall outlets and groceries), transportation, and business and administrative activities (such as those engaged in office work or in BPO services).
The informal sectors should not also be forgotten. Among them are the self-employed retailers, the small farmers catering to small food markets, the carpenters, plumbers, and skilled craftsmen who work on their own and who are vulnerable to the fluctuations of their clientele’s incomes.
Last but not the least, our OFWs will heavily feel the adverse effects when COVID-19 strikes their foreign workplaces. To quote the ILO: “Large reductions are foreseen in the Arab States (8.1 percent, equivalent to 5 million fulltime workers), Europe (7.8 percent, or 12 million full-time workers), and Asia and the Pacific (7.2 percent, 125 million full-time workers).”
Loss of work in their foreign posts may mean their repatriation and inclusion among our unemployed; at the very least, it translates to lesser or no remittances to their Philippine families.
On the part of business, the workfrom-home arrangement cannot but affect productivity and profitability. Businesses heavily dependent on person-to-person marketing will see their sales dip as their agents are immobilized by the lockdown and as their support operations are hampered by lockdown restrictions. Buyers’ lack of mobility, on the other hand, will be a telling blow on all businesses, save perhaps for those who can sell on-line.
All these translate to continuing hardships for the greater number of our people, particularly those from Metro Manila and other urban areas. Under these circumstances, government has to respond, particularly to the youths, through very imaginative approaches. (To be continued)