SOLON: TIME TO LAY DOWN UNEMPLOYMENT INSURANCE

AS the Philippines’s jobs situation continues to show enduring weaknesses, an economist-lawmaker on Thursday said the government must shift the social benefits system from targeted cash transfers to some form of universal unemployment insurance.

Albay Rep. Joey Sarte Salceda, a senior economist of the House of Representatives, said the current jobs situation demonstrates that economic scarring continues to affect key sectors of the economy.

“For policymakers, the lesson I derive here is we must eventually shift our social benefits system from targeted cash transfers, to some form of universal unemployment insurance. There are workers who may not necessarily be poor yet (recently unemployed, for example), but are getting there —and our social benefits system is likely not adept enough to catch up to them,” he said.

“At the same time, we must be more aggressive with job creation. Temporary cash-forwork programs will not address structural issues that hamper jobs growth,” he added.

On Thursday, the Philippine

Statistics Authority (PSA) said that 2.93 million of Filipinos were jobless in May 2022. This translated to an unemployment rate of 6 percent during the period.

“I am particularly concerned by the fact that the increase in the number of unemployed persons (770,000) exceeds the number of new members of the labor force (550,000),” said Salceda.

“In other words, not only were we not able to find new jobs for new workers (likely due to the end of academic requirements). We also lost some jobs that already existed in April,” he added.

According to Salceda, this is not reassuring for equitable economic development and this means that the growth figures from last quarter of 8.3 percent are accruing to people who already have secure jobs; and is not creating new employment.

“It is also not reassuring in view of rising inflation. Conventional economics would have it that unemployment and inflation generally have an inverse relationship. We are not getting the good side of that tradeoff. This development suggests that there is an increased number of the workforce that have to bear with joblessness and higher prices,” he added.

‘Jobs bleeding’

SALCEDA said the most obvious area of jobs bleeding is agriculture and forestry, which lost about 733,000 jobs.

“We employ around a quarter of our labor force in agriculture, but the sector produces just a tenth of economic output. Taken together, these mean that jobs in that sector are both very weak and very low-paying. Prevailing agricultural productivity programs such as mechanization will increase yields and perhaps even GDP contribution, but they will also mean fewer needed farmhands,” he added.

“The jobs issue [what appears to me to be an extreme surplus of labor in the agriculture sector] will not just fade away,” the lawmaker added.

Salceda said President Ferdinand Marcos Jr. must address this along with improving food security.

“It may be necessary to face up to some difficult truths, one of which is that for some farmers, the best way to improve incomes and job security is to simply move them to better and more secure jobs. As such, the Department of Agriculture must not operate in a silo of its own mandate, and must work with other government agencies to find jobs for the farmworkers that mechanization and modernization will almost inevitably displace,” he said.