The heat against liberalized labor
Manila sizzled above 35 degrees Celsius on Labor Day, on the first of May. It was one of the hottest days of the year. Perhaps President Benigno S. C. Aquino III knew it was going to be firebrand-hot in many ways in the capital on that day, so he led the Labor Day celebrations in cooler Cebu instead.
In his traditional Labor Day address, Aquino assured all that the government was dutifully taking care of the workers, citing the recent wage increases in March that brought the daily minimum wage close to P500 (about $11.25), and stressing that he is always personally concerned about the working conditions of overseas Filipino workers ( OFWs) “wherever they may be.”
The latter affirmation was certainly a not so subtle reference to his recent successful plea to Indonesian President Joko Widodo to defer the April 28 execution of Mary Jane Veloso, an OFW caught in 2010 at the Jogjakarta Airport with 2.8 kilos of heroin in her suitcase.
Perplexingly, the Veloso family does not seem to be thankful to President Aquino for the miraculous reprieve, even if Mary Jane was the only one of 10 drug mules and traffickers saved from the firing squad. Aquino has no heart and no head, his critics say — he could have saved Mary Jane sooner and completely, as he could have saved the 44 Special Action Force members massacred by local rebel terrorists in January, in Mamasapano, in a botched extraction operation to ferret out global terrorists Marwan and Usman.
It is always Aquino’s fault, whatever happens in the Philippines — that’s what his political enemies and critics insinuate on his rapidly declining popularity with the common folk.
And the inordinate heat on Aquino seethes, as about 7,000 workers and activists rallying in steaming Manila burned his effigy on Labor Day to protest wages considered still too low, and against a law allowing employers to hire laborers for less than six months to avoid giving benefits received by regular workers. The government could have been praised for setting up nationwide job fairs on Labor Day for on-the-spot hiring of those looking for work, and onthe-job training on project “Jobstart” for high school graduates to gain work experience and start to earn money. But Aquino’s critics are resolute that Aquino can do no right, and has no heart for the suffering masses.
There are about 2.646 million employable Filipinos who have no work today, among the 40.101 million estimated total labor force. The jobless rate has decreased to 6.6% from the 7% to 8% of the work force in the previous political administration.
Still, activist groups point out that the country has the highest unemployment rate, specially as compared to neighboring countries in ASEAN. It is double the regional average of 3.2% and higher than Indonesia’s 5.7%, Myanmar’s 5.1%, Vietnam’s 3.1%, Malaysia’s 2.9%, Brunei’s 2.6%, Singapore’s 1.9%, Cambodia’s 1.7%, Laos’ 1.3% and Thailand’s 1%.
Little does it matter, it seems, that in all ASEAN, the Philippines has had the highest Gross Domestic Product (GDP) growth rate at 6.1%, leading the ASEAN 5, with Malaysia at 6%, Indonesia at 5.02%, Vietnam at 5.9% and erstwhile ASEAN superstar Thailand with its dismal 0.7%, slowed from a 2.3% expansion in 2013. But the disparity between the high GDP growth and the unemployment rate only “further highlights the exclusionary character of the country’s growth,” analysts point out.
The Philippines and Vietnam roughly have similar population bases of 95- 100 million, with 26.5% (2009) below the poverty level in the Philippines, and 11.3% (2012) poor in Vietnam. Gini ratios of 44.8% (2009) for the former and 37.6% ( 2008) for the latter suggest the income inequality between the rich and the poor in the countries (the higher percentage indicating a wider income gap in favor of the rich). Indonesia, with the highest population in ASEAN of 245 million, has a Gini ratio of 36.8% ( 2009), and a per capita GDP of $10,200 (2014 estimate) compared to per capita GDPs of $ 7,000 ( 2014 estimate) for the Philippines and $ 5,600 ( 2014 estimate) for Vietnam. Thailand, with its Gini ratio of 39.4% (2010) shows that the per capita GDP of $14,400 (2014 estimate) is skewed more equitably toward those with lesser actual income.
That 26.5% (2009 estimate) in the Philippines are below the poverty line makes it pitiful that 6.6% are unemployed, and could have heaved themselves up from hunger and their democratic share of a better quality of life — if there were opportunities provided in the economy. Thailand, with its 13.2% ( 2011 estimate) below the poverty line, has a 1% unemployment rate ( 2014 estimate), meaning that there were enough opportunities in the economy for more of the work force of 39.51 million to participate in. The governance must seriously think about domestic job creation for the unemployed.
How now is President Aquino — scorching in the extreme heat of political criticisms currently zapping him — going to break the news that ASEAN integration at the end of 2015 would entail liberalizing the domestic labor market to foreign workers? ASEAN watchers have reminded people that under the existing Labor Code of the Philippines, foreign nationals have to obtain a permit from the Department of Labor and Employment and companies wanting to hire foreign workers must first advertise all vacant positions first, to give chance to domestic job seekers. The specter of the domestic job market being opened to foreign workers under ASEAN cooperative agreements has been acknowledged by the House of Representative in a bill filed in February, reiterating the “Filipino First” policy — that Filipino citizens must be given first chance for job openings for their particular skills.
Will ASEAN accept the reiteration of Filipino First for jobs available in the Philippines, when the agreement is for the full liberalization of labor movement within the region? Filipino workers have migrated to many countries in the world without the hurdle of local labor prioritization. There are approximately 10 million to 13.5 million (with the 3.5 million increment for unregistered OFWs) remitting a record high of $24.348 billion in 2014, up $5.8 billion annually, and accounting for 8.5% of GDP that year.
The ASEAN liberalization of work force movement will exacerbate the unemployment situation in the country, threaten the development growth, and pull down more to poverty. Yes, the free competition of foreign labor with domestic labor is expected to give businesses expanded choices on skills and costs, and would mean higher efficiency and productivity. The long-term effect would be a more stable domestic production that will strengthen manufacturing and agriculture, and other economic endeavors in lieu of the risky dependence on OFW remittances and exported services subjected to the volatility of global markets, world terrorism and political upheavals. But shortterm, individual needs and situations will determine reaction and action on the demands of ASEAN, albeit predictably constrained by the country’s regional political commitments.
It is unfortunate that President Aquino is faced with so much heat from detractors at this crucial time, when the world is spinning fast to re-mold itself to the efficiencies needed to survive. Let us not add any more heat in this ignominious summer.