A Case Study on Unemployment

at

City of Calamba
I. INTRODUCTION

Unemployment is caused by many factors in a modern market economy. It can be caused

by rapid technological change, business cycle or recessions, seasonal factors in some industries

particularly such as changes in tastes and climatic conditions which affects demand for certain

products and services, individual perceptions and willingness to work and search for jobs, their

values and attitudes towards some jobs and about employers, accessibility for retraining and

acquisition of work skills, willingness and perception of unemployed of the benefits of training

and the possibility for them to get a job after the training even though they have a chance to get a

job, discrimination in the workplace based on race, color. religion, ethnicity, age and class.

Unemployment has been a persistent problem in the Philippines. The unemployment rate

steadily increased from 1990 until 2000. After a slight decline in 2001, the rate continued to rise

until peaking at 11.7% in 2005. It then dropped to 8.7% in 2006. Currently, the unemployment

rate stands at 7.3%. These numbers are much higher than other South East Asian countries,

whose rates tend to stay below 6%, barely peaking higher than 8%. What has caused the

Philippines to have such a high unemployment rate?

But probably, one cause of unemployment in the Philippines may be lack of education.

With the increasing demands of the fast developing world, it is really hard to find jobs when you

are not a graduate of a particular skill or course. Though the Philippines is a literate country, its

not enough to be able to reach the qualifications of most in-demand jobs because even mere sales

ladies nowadays are required to have at least 1-2 years in college. We are facing a competitive

world and its a must to reach the norms of development. Thus, a high educational attainment,

which most Filipinos lack, is one way to uplift the unemployment rate of the country.
II. RESEARCH LOCALS

A high rate of population growth, lack of access to land, insufficient job creation in

industry, and a history of inappropriate economic policies contributed to high unemployment and

underemployment and a relatively high proportion of the labor force being in low-productivity,

service sector jobs in the late 1980s. Real wages were low, having declined at about 3 percent

per year since 1960, and relatively weak labor unions were unable to substantially affect the

deterioration of workers' earning power.

CALAMBA, LAGUNA - The Trade Union Congress of the Philippines says there are

700,000 college students graduating this year and joining the workforce, but not all of them will

or can easily land a job.

The governments suggestion to establish an unemployment insurance scheme was

lauded by many quarters. It was unclear though how such a scheme could be implemented and

what kind of administrative framework it could be based on. There were a number of ideas

proposed, ranging from the provision of financial assistance to assistance for basic needs, but no

serious discussions ever took off. Also, no specific government agency came forward to take the

lead in the deliberations.

III. RELATED LITERATURE

The Philippine Statistics Authoritys Labor Force Survey showed the countrys

unemployment rate as of January this year at 7.5 percent, up from the previous years 7.1

percent.

The agency also said there are 10.07 million able-bodied workers who are either jobless

(2.969 million) or are underemployed (7.101 million).

And many of those who do find work find themselves badly mismatched with their jobs.

Take Mark Soreda, a native of Sorsogon City who works as a production supervisor in

Canlubang who is a chemical engineer educated at the University of the Philippines Los Baos.

He wants to practice his profession and work in the petroleum industry, abroad if possible. But as

a scholar of the Department of Science and Technology, he is obliged to work for a number of

years in the country.

Ronaldo Vibal, who has a bachelors degree in commerce, says there is not much he has

learned that he can apply to the job he has held for 18 years -- an administrative assistant at a

state university who takes care of paperwork and is in charge of the issuance of equipment for

classroom use. Aside from this, he says, government employees like himself have relatively

lower salaries and his pay is not enough to support a family of five.

Narciso de Vera, a native of Bulusan, Sorsogon, is a construction foreman in Calamba

City. A high school graduate with some college education, he started out as a timekeeper and a

bodegero or warehouseman. He has been employed with a contractor for 14 years now and says

he is lucky to work for a kababayan. While the construction boom helped land work, De Vera

says it remains hard to look for a job, especially one that pays decently.
 A manager of an employment agency in Calamba, who asked not to be identified,

confirmed how hard it is to land a job -- only one of every 10 applicants is hired. The current

demand, she said, is for production operators, which requires that applicants be at least high

school graduates. She added that there are only a few opportunities for college graduates, and

these are mostly in the call-center and business-process-outsourcing industries.

She named two major contributors to unemployment and underemployment: age limits

and the length of contracts. Most employers prefer applicants in their 20s. On the other hand, a

typical work contract runs for only five months to get around the law requiring employers to

regularize a worker after six months and grant them benefits.

Milagros Mata, Laguna director for the Department of Labor and Employment,

confirmed that there, indeed, exists widespread mismatch between applicants qualifications and

expectations, and labor demand.

However, she attributes this to graduates who are choosy in looking for jobs, often

putting too much premium on prestige or pressed by parents who demand they go for nothing

less than white-collar jobs. Graduates and their parents, Mata said, have a low appreciation for

the labor market relationship. Since there is currently a high demand for technical labor, she says

DOLE and the Technical Education and Skills Development Authority recommend that students

equip themselves with technical and vocational skills.

Mata said DOLE has in place programs that can help address the job-to-skill mismatch.

One is Project JobsFit: The DOLE 2020 Vision, which focuses on industry projection for

emerging markets and labor demand. Another is the Labor Education for Graduating Students

seminar, which orients graduating students on employment and labor matters. This year, LEGS
had 2,630 participants in Laguna. DOLE also created a job portal, Phil-Job.net (http://www.phil-

jobnet.dole.gov.ph/), for accessible information on job vacancies.

The job-to-skill mismatch had already been foreseen by academe 10-15 years ago,

according to Dr. Merlyne Paunlagui, assistant professor and director of the Center for Strategic

Planning and Policy Studies at the College of Public Affairs and Development in UPLB.

However, she said the educational system has been more reactive rather than proactive in coping

with the changing development and industry demands. For example, she said the nursing boom

several years ago saw educational institutions begin offering nursing courses. Unfortunately,

many of these schools were not regulated, thus their graduates were not accepted for lack of

skills and training.

Paunlagui said the private sector is trying to cope with the situation. For example, private

educational institutions can easily tie up with various companies to ensure their students will

have ready employment upon graduation.

But ASEAN economic integration in 2015 poses a challenge to the competitiveness and

readiness of the country, including the educational system. Educational institutions need to

tailor-fit their curricula to meet local and international industry demands or risk producing

graduates unable to meet new job requirements.

What is clear is that government needs to address the job-to-skill mismatch as soon as it

can if the country is to maintain its advantage in the region or be stuck with a labor force that can

only continue to swell with the ranks of the unemployed and underemployed.
IV. CONSOLIDATED RESULT FOR INTERVIEW

The interview concludes that unemployment insurance in the Philippines is feasible and that

in combination with possible changes in the labor law could help to make the labor market more

protected for workers at the same time as more able to cope with changes in production and

productivity demands as well as with global competition.

V. CONCLUSION

The general situation in the Philippines today is not satisfactory: Relatively high

unemployment, low compliance with social security law, unstable employment relations for

many and a volatile labor market. There is room for improvement and the present proposal tries

to make a suggestion in this direction. Further steps would include discussions about the

parameters, which are all subject to debate on issues such as:

Benefit levels

Membership rules

Enforcement possibilities

Amendments to the Labor Law

There are certain facts that are not debatable, especially the foreseeable costs of proposed

benefits. But simulations like the ones made outlined in this report can support discussions and

help to find agreements.

In the end, there will be a progress only if the partners, namely employers, trade unions and

government can agree on a common strategy.

VI. RECOMMENDATION

Jobs Fair is an employment facilitation strategy aimed to fast-track the meeting of

jobseekers and employers/overseas recruitment agencies in one venue at a specific date to

reduce cost, time and effort particularly on the part of the applicants. This is open to all

unemployed, skilled and unskilled workers, fresh college graduates, graduates of training

institutions, displaced workers and employees seeking advancement. During the Jobs Fair,

applicants select vacancies suited to their qualifications and employers could interview and hire

on the spot qualified workers. Several agencies are invited to provide self-employed and

training assistance.

ILO Conventions 102 and 168 provide a basis for the development of unemployment

benefit schemes.

The proposal is based on these ILO conventions and aims to improve social protection and

employment on the one hand and stem fraudulent practices and informal labor relations on the

other hand. By making labor relations more market oriented and at the same time introducing

more social protection in the case of unemployment, it is expected that employers would be able

to end the practice of hiring many people for 6 months only. Fluctuation on the labor market

would thus be reduced and employers would hire staff more easily if they do not fear the

commitment in the same way as today.

REFERENCES
Alvarez-Parra, Fernando A. and Sanchez, Juan M.: Unemployment Insurance in an Economy
with a Hidden Labor Market. MPRA Paper No. 2531, November 2007.
Bitonio, B. (2004). Labor Flexibility and Workers' Representation in the Philippines.
International Industrial Relations Association 5th Asian Regional Congress. Seoul, Korea.
Dalumpines, Benjamin M.: Exploring the Possibilities of a Philippine Unemployment Insurance
Scheme. ILS Discussion Paper Series 07-2009
http://interaksyon.com/article/85793/labor-pains--in-calamba-more-workers-fewer-jobs
http://calabarzon.dole.gov.ph/regionservicesarchive.php
http://lpulaguna.edu.ph/wp-content/uploads/2016/08/Proposed-Producers%E2%80%99-
Cooperative-In-Barangay-Makiling-Calambacity-Laguna.pdf