IBON Foundation
If the employment situation is improving, why is poverty getting worse? Research group IBON asked this in reaction to the June 2024 labor force survey results. This must be because most jobs being created pay so low that millions of Filipinos still do not earn enough to pay for their basic needs especially amid high prices and rising inflation, said the group.
The officially reported number of employed persons increased year-on-year by a considerable 1.4 million from 48.8 million in June 2023 to 50.3 million in June 2024. The number of unemployed decreased by 707,000 from 2.3 million to 1.6 million. Underemployed persons meanwhile grew by 208,000 from 5.9 million to 6.1 million in the same period.
The quality of jobs also appears to be improving according to the usual indicators for this. By class of worker, there was a 2.0 million increase in the number of wage and salary workers, largely due to a 2.6 million jump in private establishment workers to 25.8 million which offset the 553,000 decline in public sector workers. By hours worked, those employed in full-time work grew by 3.1 million to 34.8 million, while part-time workers fell by 1.5 million to around 15 million.
IBON however pointed out that 1.3 million or an overwhelming 89% of the net increase in the number of employed persons was in sectors paying below the national average daily basic pay (ADBP). Only 163,000 or 11% of the net increase was in sectors paying above the national ADBP.
The most jobs created in June 2024 from the year before were in: construction which grew by 938,000 to 5.8 million; wholesale and retail trade which grew by 527,000 to 10.6 million; accommodation and food service activities which grew by 396,000 to 2.6 million; and manufacturing which grew by 353,000 to 3.9 million.
Those four subsectors with an increase in jobs are among the six worst paying in the country, said the group, with an average daily basic pay of Php540 for construction, Php470 for wholesale and retail trade, Php486 for accommodation and food service, and Php546 for manufacturing. These are all far below the national ADBP of Php616.
The pay in these areas was only higher than in “other service activities” (Php351) and agriculture (Php344). There was a negligible 49,000 increase in jobs in “other service activities” and a huge 997,000 decrease in agriculture.
These wages are not even half of the Php1,207 family living wage (FLW) estimated by IBON as of July 2024. With such low wages, IBON said that it is no wonder that many Filipino families have a hard time keeping up with the rising cost of living.
This lack of decent pay amid high prices is pushing more Filipinos into hunger and poverty, said the group. Despite supposedly improving employment conditions, the number of self-rated poor families grew by 3.5 million to 16 million (58% of families) in June 2024 from the same period the year before, according to the Social Weather Stations (SWS). Filipino families experiencing involuntary hunger meanwhile rose by 2 million to 4.9 million (18% of families) in June 2024.
IBON said that the Marcos administration’s hype of a robust and resilient labor market means little when Filipino workers grapple with low pay and poverty. This only shows how being reported as employed does not mean already being able to surmount poverty. If the administration is serious about improving the jobs situation, it should ensure substantial wage increases towards a family living wage, support small businesses and producers, and develop the domestic production economy to create sustainable work, said the group.
