Accounting Jobs

Jobless in for tougher times–study

MANILA, Philippines — Workers who lose regular jobs during the current economic crisis are in for tough times, according to a study by a university research institute.

The study by the Angelo King Institute of Economics and Business Studies of the De La Salle University-Manila said displaced workers would face low re-employment rates and significant wage losses in the short and medium term since they would have to compete with younger workers over mostly non-regular work, and contractual, casual and piece-rate jobs.

The paper, authored by economics professor Clarence Pascual, was presented Saturday at a forum held at the Bantayog ng mga Bayani (Monument of Heroes) in Quezon City organized by the Partido ng Manggagawa (PM, Workers’ Party) as part of its 8th founding anniversary celebration.

At the forum, PM chair Renato Magtubo presented the labor group’s campaign for a bailout package for workers and the poor that would consist of direct subsidies for displaced workers from the Social Security System, Government Service Insurance System and/or Overseas Workers Welfare Administration; tax refunds for workers; reforms on public employment program; extension of health coverage for displaced workers; and a moratorium on demolitions and evictions.

Pascual’s study of displaced workers in 2008 showed the dismal prospects they would face after being displaced by the global recession that had claimed tens of thousands of local jobs.

The study surveyed some 150 production workers of a local garments company that closed shop in November 2003. It looked into the employment experience and current labor force status of displaced workers five years after layoff. Extensive interviews with displaced workers from four other companies were also conducted to gather qualitative data and insights on life after layoff.

The study was done in relation to the impact of globalization on workers’ welfare but findings touched the current situation experienced by crisis-stricken countries such as the Philippines.

According to the case study, the likelihood of displaced workers finding any kind of wage employment is dismally low while the chances of landing regular fulltime employment similar to what they have lost is nil.

Only 32 percent of the workers “found a wage job at anytime in the next five years after layoff. When the survey was taken in mid-2008, a mere 16 percent of the displaced workers were holding on to a wage job. Five years after losing their jobs, over 60 percent of the workers were still unemployed or have exited from the labor force,” explained Pascual.

Workers cited “age limit” as the most important reason for their difficulty in finding a new job.

Pascual added that an overwhelming majority of those who found a new wage job after displacement took up temporary, non-regular jobs that paid lower wages. Non-regular jobs were also marked by unemployment spells in between contracts or jobs. The unemployment and earnings losses suffered by displaced workers did not improve over time.

At the time of the survey, 22 percent of the laid off workers are engaged in self-employment, slightly higher than the proportion employed in formal wage jobs.

“Does self-employment and entrepreneurship then offer a way out for displaced workers? Our discussion with affected workers does not give us this impression. Self-employment is generally seen as employment of last resort, marked by irregular earnings and uncertainty of business. Long-term sustainability is a key issue for micro businesses,” Pascual said.

The study also found that job loss could have dire consequences on the health and wellbeing of the worker and his or her family. Being laid off from work raises the risk of the worker’s family falling into poverty. The loss of a major source of income for the family is compounded by equally serious problems.

Displaced workers are also vulnerable to illnesses of varying seriousness, from frequent headaches to hypertension or strokes. In more than a few cases, these illnesses lead to workers’ deaths. With the loss of work-related health insurance, laid off workers cannot afford the high cost of drugs and health care. Loss of health insurance can also impact on young children.

Interviews with displaced workers also revealed that job loss resulted in a higher risk of children dropping out of school.

The study found that production workers, despite minimum level wages, were able to send children to college, relying on loans from employers, friends and informal lenders.

“Their regular job was their biggest asset, a gold standard collateral in the eyes of creditors. The loss of a regular job means loss of access to credit, which could mean children dropping out of school or the inability to meet costly contingencies,” Pascual said.

To improve re-employment possibilities, Pascual said strategic focus on generating adequate productive employment, including public employment programs, would be helpful.

While there were more self-employed workers than wage workers among the displaced workers in the survey, self-employment was more often than not considered the employment of last resort by the workers.

Self-employment, he explained, was marked by low and irregular earnings and lack of long-term sustainability. The study covered the period 2004-2008, a period of respectable economic growth.

Promoting self-employment and micro entrepreneurship in the context of a growing economy might have some merit, but not during a slowdown or recession, Pascual concluded.

To avoid the more drastic consequences of job loss, the study recommended the expansion of new and existing social protection schemes to cover workers laid off in the current crisis. This may include, according to the author, free extension of Philippine Health Insurance Corp. (PhilHealth) membership for displaced for a period of five years after layoff.

The government may also consider giving out scholarships or education loans for displaced workers with children at the tertiary level of schooling.

Another option is automatic inclusion in the government’s conditional cash transfer program for displaced workers with children in primary and secondary levels.

The government and the SSS could explore some form of income support for workers laid off by the global crisis, the study recommended.

Source: Jerome Aning