1. The Philippine Labor Situation
As the global economic crisis reaches new lows this first half and with worse to follow in the coming months or even years, the Philippine labor force is being battered by one gut-level whammy after another. While the effects of the surge in prices of petroleum products, rice and electricity are indeed being borne by all sectors of society, the country's 36-million labor force is taking the lion's share of the beating by virtue of its ever-growing abundance in an ever-shrinking economy.
BY THE ECUMENICAL INSTUTUTE FOR LABOR EDUCATION AND REASEARCH (EILER)LABOR WATCHPosted by BulatlatVol. VIII, No. 30, August 31-September 6, 2008
As the global economic crisis reaches new lows this first half and with worse to follow in the coming months or even years, the Philippine labor force is being battered by one gut-level whammy after another. While the effects of the surge in prices of petroleum products, rice and electricity are indeed being borne by all sectors of society, the country's 36-million labor force is taking the lion's share of the beating by virtue of its ever-growing abundance in an ever-shrinking economy.
The highly-unpopular government under President Gloria Macapagal-Arroyo is trying to handle the situation by instituting populist policies designed to take the heat off its governance, while conveniently avoiding crying solutions that could make significant inroads towards addressing the roots of the problem. Labor and general public unrest fulminates as the regime continues to hedge on its social obligations, while faithfully observing policies it deems required to keep it in good terms with foreign and local big business interests, as well as with multilateral funding institutions (MFIs) that grant its perennial request for loans. What's in store for Philippine workers the rest of this year and beyond is foretold by the following objective reading of the local labor situation.
Criminally-low wages
By its own minimalist computation, the Arroyo government pegs the family living wage (or daily-cost-of-living/DCOL for a family of six) to be P894 ($19.466 at an exchange rate of $1=P45.925); on the other hand, the current nominal minimum wage (including ECOLAs) is only P382 ($8.535) in the National Capital Region (NCR), translating to a wage gap of P512 ($11.148). This also means that the nominal wage is only 42.7 percent of the living wage.
Real minimum wage is at P243.31 ($5.297) with 2000 as the baseline year. While nominal minimum wages across regions are higher now on the average by 39 percent as compared with those in 2001, the year that Mrs. Arroyo took over as President of the country, real minimum wages are now lower by 7 percent than those at the start of her term.
In the face of such an " indecent" disparity, the current administration still refuses to legislate a P125 ($2.72) across-the-board wage hike, long demanded by militant labor unions under the Kilusang Mayo Uno (KMU) and the broad alliances of the Wage Increase Solidarity P125 in 1999-2000 and the Unity for P 125 at present., and on the basis of social justice. At the very least, doing so would have raised the nominal minimum wage to P507 ($11.039), still in deficit when compared with the living wage but certainly providing some immediate relief and better elbow room for minimum wage earners to weather out the crisis, until the necessary next round of increases. But since Arroyo's assumption of power, she has only approved an accrued measly basic wage hike of P62 ($1.35) and with the rest as incremental increases in cost-of-living-allowances (COLA), including the P15 ($0.326) and P5 ($0.108) NCR increase last June 14.This has hardly made a dent on the wage gap of P260 ($5.66) then existing in 2001 and the P384 ($8.36) increase in the family living wage (or DCOL) that has piled up on top in the last 7 years, leading up to the current wage deficit of P512.
Hiding unemployment, " globalizing" jobs
Stymied by worsening landlessness in the countrysides and a chronically backward industrial sector, job generation under Arroyo's watch has failed to keep up with a constantly growing labor force, currently at 36,450,000, of which 33,536,000 are officially " employed" . The country's unemployment rate worsened from 9.58 percent in 1996-2000 to 11.4 percent in 2001-2005.
After arbitrarily redefining " unemployed" beginning in April 2005 to exclude own-account, domestic household and unpaid family workers, the Arroyo government was able to magically reduce subsequent unemployment figures by 1.8 million. The current joblessness statistic of 2.9 million was derived using this manipulative computation, easily rectified by using the old definition, which puts the country's real unemployment rate in double-digits and makes it the highest in Asia. Underemployment, on the other hand, is at 6.6 million individuals.
State-sponsored schemes to sop up the country's surplus labor have reached new heights, with the Arroyo government throwing its full weight behind such services-oriented solutions as labor-export and business-process outsourcing (BPO), twin mantras for " development" under neoliberalism aggressively promoted by MFIs such as the IMF-WB and the ADB. While these stop-gap measures do give some temporary relief to a regime beleaguered by social pressures of its own making, they have only further exposed Filipino workers to violations of core labor standards here and abroad while drawing the economy farther away from a much-needed comprehensive and strategic industrialization program.
Last year, the number of documented overseas Filipinos have reached 8.7 million. Around 5 million of these are contract-based workers, while the remaining 3.7 million are permanent residents or immigrants. Their remittances, amounting to $17 billion in 2007, have grown by an annual average of 16 percent since 2001 and now comprises 10 percent of the current GDP.
On the other hand, the BPO " industry" has burgeoned not only in the NCR but also in outlying regions such as Central Luzon, Central Visayas and Southern Mindanao. Centered mainly around contact centers (or " call centers" ), BPO has been touted by the Arroyo government as a " recession-proof" alternative for the upper-scale job market, and most certainly a boon for MNCs abroad eager to save up on peripheral operations cost. Accounting for 2.5 percent of the gross domestic product (GDP) in 2005 and employing around 163,000 workers (70 percent of whom are in call centers), the BPO industry is optimistically projected to employ some 1 million workers by 2010.
But this seeming oasis of employment opportunity is now under scrutiny from trade unionists for being extremely exploitative, anti-union, and generally hazardous to workers' health. On the average, local call center employees receive only one-fifth of the salaries of their counterparts in subcontracting countries such as the US and UK. Majority of these local workers also suffer from a host of work-related health problems, most of which are lethal in the short- or long-run.
Workers who do find jobs in the Philippines find that they face another big hurdle after being hired: contractualization. Big businesses, whether foreign or local, have long mastered the fine art of labor flexibilization in employment, assisted no end by a President and a government that is thoroughly sold out on the scheme. Based on the 2003 admission of Donald Dee, President of Employers Confederation of the Philippines (ECOP), 7 out 10 firms in the country practice contractualization. Some of the worst " contractualizers" among companies are also among the biggest, such as Eduardo " Danding" Cojuangco's San Miguel Corporation (SMC) conglomerate (1,100 regulars out of its 26,000 total workforce); Henry Sy's SM Shoemart (1,300 regulars out of 20,000); and Manny Pangilinan's Philippine Long Distance Telephone Company (4,100 out of 10,000). Such widespread destruction of tenurial security in labor has had a profound impact on Philippine workers' freedom to exercise their trade union and other democratic rights. Most of all, massive contactualization has greatly reduced the variable capital for wages, with the monopoly capitalists seeking ever-increasing superprofits in the face of the current world capitalist crisis of overproduction.
Crippled unions, no unions
More than at any other period in its history, institutionalized trade unionism in the Philippines has become a sham. The Arroyo government's all-out rush to attune the local labor market to the demands of the neoliberal agenda has run roughshod over core labor standards, seemingly leaving no option to workers but to adopt an independent and militant form of advocacy.
While local laws such as the Labor Code exist that formally guarantee the right of workers to unionize, the finer print and state actions themselves say otherwise. Laws that constrain or even prohibit the formation and actions of workers' organizations abound, foremost of which are those that allow " qualified" contractualization like Articles 106-109 of the Labor Code, the Herrera Law and the Department of Labor and Employment's (DOLE) D.O. 18-02; mandatory 30-day notice in the filing of strikes; the Marcos-era strike provision that allows ingress and egress of company goods and scabs; and the indiscriminate issuance of Assumption of Jurisdiction (AJ) orders by the DOLE that covers even non-strategic or non-vital industries.
Among the anti-union legislation and practices arrayed against Philippine labor, contractualization is especially destructive. Whereas there are no explicit provisions in any law against unionizing of contractuals, their concrete circumstances itself becomes the prohibition. No employer would consent to them being part of a union's bargaining coverage, since they only have 5-month contracts at the most. For the same reason, no union composed mostly or exclusively of contractual workers in a firm would be able to obtain a CBA with management or even to uphold one in a practicable period of time. Under this situation, contractualization is turned into a benign-looking but immensely effective tool by big business to block nascent unionism or to bust existing unions.
Those that persist and succeed in forming unions immediately become targets of persecution by big capitalists and the state, who seem to find common ground in fostering a " no union, no strike" environment particularly in the country's special economic zones. To cite a dramatic case, Gerardo Cristobal, President of the EMI-Yazaki Garments union in Imus, Cavite was fatally shot last March 10 after having survived a previous attempt last year. Also a leader of broad-based labor alliance Solidarity of Cavite Workers (SCW), Cristobal became the 80th in a list of trade unionists killed for political reasons under the Arroyo government. None of these killings have been satisfactorily prosecuted to date.
Given such hostile conditions, it comes as no surprise that the number of genuinely unionized workers in the Philippines has sharply declined. While in 1995 14.6 percent of the labor force was still unionized, 2007 data shows a much-reduced 5.6 percent or 16,861 unions with a total membership of 1,893,000 workers. But even this is not reflective of the real picture, since DOLE does not monitor the status of unions on a regular basis and includes even those in firms that have closed down over the past few years. A more accurate benchmark would be the number of existing CBAs and their workforce coverage, which now counts 1,573 agreements covering some 222,000 workers all over the country. These figures portray the true state of union-building in the country, and is a damning record of big capitalist-state collusion in the suppression of Philippine workers' democratic rights under " globalization" .
Renewed bases for struggle and unity
There are two major reasons that make the big business ideal of " cheap and docile labor" in the Philippines a temporal victory at most. Firstly, the current global economic crisis is projected by analysts to last even longer than the previous ones; and secondly, the labor movement's core of independent and militant labor are not known for taking such periodic crises lying down.
In the midst of the recent alarming slew of price hikes, militant and independent labor organizations quickly formed themselves into an alliance called the " Unity for P125" . It aims to build a broad mass movement among private sector workers that will leverage not only for an immediate and substantial wage increase but for the scrapping of regional wage boards (RWBs) that are being used by government to regulate wage fixing in favor of big capital.
Workers' organizations are also in the thick of multisectoral networks and alliances that seek to bring down the prices of oil, electricity and rice. Among the concrete public measures urgently being sought are the scrapping of 12 percent value-added tax on petroleum products, repeal of the Oil Deregulation Law, lowering of systems-loss charges in power rates, and subsidized pricing in rice. More strategic calls, however, are also being floated to deal with price spikes in the long term and address their systemic roots, such as nationalization of the oil and power industry and genuine agrarian reform. Hit hard by crisis engendered locally and abroad, the Philippine labor sector gathers its strength to fight not only for its own welfare but for those of other marginalized sectors as well. EILER/Posted by Bulatlat
http://www.bulatlat.com/2008/08/philippine-labor-situation
Massive Layoffs Signal Global Depression:
Review of Labor Situation in the Philippines
Ecumenical Institute for Labor Education and Research, Inc
The current deep recession that is expected to lead into a severe depression has began to kick into high gear in the Philippines in the first few weeks of the new year, portending worse things to come for the country's 36-million strong labor force. Despite the government's claims at " safeguarding" the workers " amidst the global storm" , the people and the ordinary workers will evidently be made to bear the heaviest blows of the crisis.
From bad to worseDisparities between the nominal and family living wages continue to widen. In the NCR alone where the family living wage is at P904 and the nominal wage including the cost of living allowances is at P382 last year , the wage gap is already pegged at P522 or a staggering 42.3% difference.
This difference entails a lowering of living standards through belt tightening measures. In fact, the National Statistical Coordination Board (NSCB) said that poor Filipino families spent less on food ashigh prices of food eats up more than 60 percent of their budget.
The crisis definitely exacerbates the chronic poverty afflicting most sections of the population. Hunger incidence reached a new record high according to the fourth quarter of 2008 report on hunger by the Social Weather Stations (SWS) placing the estimated number of hungry families to 4.3 million.
Not " business as usual" In 2008, official government statistics pronounced slowdown in employment to 1.8% from 2.8% growth rate in 2007. Sectors of industry that which suffered the most were manufacturing, commodity and service exports. Overall industry sector employment fell by 1.5%, with the manufacturing subsector taking a heavy battering with an employment drop of 135,000 due to slowdown in exports.
" It is not business as usual" , observed the labor secretary with the mounting layoffs. The National Wages and Productivity Commission (NWPC) said the crisis will have great impact on these sectors - information technology (IT), electronics and semiconductors, mining and even fruits and vegetables producers.
Texas Instruments, one of the world's biggest semiconductor manufacturers, has laid off 400 workers in December from its factory in the Baguio Economic Zone Authority (BEZA) due to the crisis. In the mining sector, 600 employees and contractors at the Berong nickel project in Palawan of the Toledo Mining Corp. (TMC) were laid off " on the presumption of an extended period of low demand and low nickel prices" due to the anticipation of prolonged recession.
Furniture exporters also have cut back on labor due to weakened demand in the US. In Mactan Economic Zone, Maithland Smith Ltd., a furniture company, and Taiyo Yuden Philippines, Inc. which produces cellular phones, also laid off workers.
Slowdowns and closures in garments factory in the Cavite Export Processing Zone were reported by the Solidarity of Cavite Workers (SCW).
Lafarge Cement Services and Cemex Philippines also laid off hundreds of workers, while Holcim Philippines Inc. in Misamis Oriental another cement production firm - has reallocated its workers following the closure of a kiln due to the slowdown in the demand of the product.
Business process outsourcing (BPO) companies are also facing profit loss due to declining demand for subcontracted work. Advanced Contact Solutions (ACS), an Australian-based company was reported to have slashed 900 workers last year after losing a major US client.
Amkor Technology laid off all of its 3,000 contractual women workers in September 2008. Integrated Microelectronics Inc. (IMI), which previously employed 17,000 workers, also retrenched 3,000 contractual workers last December. IMI also implemented forced leaves to more than 1,000 regular workers in December 2008.
The Bureau of Labor and Employment Statistics pegged the unemployment rate for last year at 7.4% or 2.716 million. But IBON Foundation estimated that there were 4.1 million unemployed last year. With this underemployment figure, joblessness has worsened at 10.7 million.
Silent but ruthless repressionThe Department of Labor and Employment dubbed 2008 as a historic milestone as it posted only 5 strikes the lowest rate in seven years. Last year was boasted as a year of industrial peace but the reality underneath such " still waters" is very alarming.
The Center for Trade Union and Human Rights (CTUHR) recorded 211 new cases of trade union and human rights violations nationwide from January to November 2008. This is 23.7% higher than the 161 cases recorded in 2007. Almost half of these or 105 cases are violations to civil-political rights of workers including harassments, grave threats and killings of workers and labor advocates.
Three union leaders Gerardo Cristobal of Samahan ng Manggagawa sa EMI-Yasaki-Independent, Maximo Baranda of Compostela Workers Association, and Rolando Antolihao of Global Fruits/ Lapanday Food Corporation were felled by bullets last year.
On the other hand, more than half or 106 cases are violation to economic, social and cultural rights of workers. Workers experienced ruthless attacks on their picket lines and peaceful collective actions.
A patent Martial Law tactic used by the Marcos dictatorship to quell labor unrest was recently revived. It involves the arbitrary arrest and filing of criminal cases against union leaders and advocates. About 12 cases were reported already including the illegal arrest of Atty. Remigio Saladero, legal counsel of the militant labor center Kilusang Mayo Uno (KMU) and Executive Director of the Pro-Labor Center (PLACE). He is only one of 71 leaders of progressive organizations in Southern Tagalog 13 of whom were union leaders and labor advocates who were charged with various common crimes.
These trade union and human rights violations are meant to cripple the independent workers' movement. Its chilling effect certainly has contributed to the weakening of trade unionism in the Philippines, , with the organized private sector now being only at 10.54% of the total workforce.
More storms aheadThis year, more layoffs are expected in the electronics, garments and other export sectors. The BPO will continue to have jitters with regards to job retention. Accenture Manila was reported to have dropped hundreds of workers this month. Intel Corp.,a California-based and the first semiconductor firm established in the country, will shutter its Cavite factory, laying off 1,800 workers. This number will put the number of retrenched workers in the semiconductor industry due to the economic downturn to 5,000 workers.
About 40,000 workers in Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) stand to lose their jobs by the first half of the year according to PAMANTIK-KMU, mostly from the electronics and car manufacturing industries in the export processing zone. Amkor Technology Inc. will lay off 2,000 regular workforce by February. Workers of Samsung, Yazaki, F-Tech, Fujitsu, NEC, TDK, and Matsushita will also face layoff in the first quarter.
In Calabarzon, car manufacturing companies affected by the global financial crisis implemented compressed work week and other schemes that would likely lead to retrenchments.
Starting January, Toyota Motor Philippines implemented a Monday-no-production day and will " temporarily" get rid of its 500 contractuals and on-the-job trainees (OJT) by March.
Nissan retrenched 40 regulars in December 2008. The company will retrench 70 more workers in February. Keihin-Philippines plans to implement a four-day work month this February. Ford now maintains only 18 employees out of the previously 400 workforce. Isuzu-Philippines will soon follow the footsteps of its mother company, which displaced 30,000 Japanese employees.
Ford RP unit is open to lay-off options if the " industry continues its decline" .
Flexible work such as compressed work-week, contractualization and other flexible measures will be employed. The labor department approximates that at least 19, 000 workers are now covered by various cost-cutting measures such as reduced work-weeks, work hours or operations.
More taxes will be imposed by the government and the poor will definitely be forced to carry the burden. No wage hike will be given to the workers so that their families can weather out the current crisis in a reasonably humane way.
There is doubt that the government can meet its target creation of three million jobs this year. Even the seemingly rock-solid option of relying on labor export will be squeezed as OFWs continue to lose jobs abroad. Some 60,000 OFWs face the prospect of job loss by the first quarter of 2009.
The way forwardDespite the government's claims at " safeguarding" the workers " amidst the global storm" , the people and the ordinary workers will evidently be made to bear the brunt of the crisis. But, safeguarding workers' welfare amid the crisis should be concrete such as through wage hikes and price controls which could soften the shock on dwindling incomes and falling living standards. A serious evaluation of the job generation scheme of the government should also be made to refocus the country to national industrialization, which would push economic capacity and accelerate jobs creation .
Safeguarding workers' welfare are also being consciously advanced by the workers themselves. In a landmark victory in 2008, women workers of Bleustar Manufacturing and Marketing Corporation (BMMC), maker of Advan shoes, have struggled against sexual harassment in the workplace and for better working conditions through building their union. Through a strike, they have asserted their rights. Workers of the Kowloon Restaurant along West Avenue in Quezon City were able to secured an initial victory after four months of strike. The National Labor Relations Commission, in its decision dated December 22 ordered the reinstatement of all dismissed workers with full back wages.
Amidst the rising storm of a global economic depression unprecedented since the 1930s, only the workers' own concerted actions to better their lot offer any glimmer of hope. The following years will certainly be a landmark of sorts in the history of workers' struggles not only in the Philippines, but also in other parts of the globe
http://www.laborrights.org/end-violence-against-trade-unions/philippines/1962
EMPLOYMENT RATE REPORTED AT 92.6 PERCENT IN JULY 2008 Results from the July 2008 Labor Force Survey (LFS)
http://www.census.gov.ph/data/pressrelease/2008/lf0803tx.html
PhilippinesJuly 2008 1/July 2007Total 15 years old and over(in '000)58,11956,857Labor Force Participation Rate (%)64.363.6Employment Rate (%)92.692.2Unemployment Rate (%) 7.47.8Underemployment Rate (%)21.022.0
Notes: 1/Estimates for July 2008 are preliminary and may change. 2/Population 15 years and over is from the 2000 Census-based population projections.
The employment rate estimated for July 2008 was 92.6 percent. This implies that nine in every 10 persons in the labor force were employed in July 2008. The current figure is not significantly different from the July 2007 rate which is 92.2 percent. The July 2008 LFS also revealed that the labor force participation rate is 64.3 percent. This means that the size of the labor force in July 2008 was approximately 37.3 million out of the estimated 58.1 million population 15 years and older for that period. Compared to the labor force participation rate in July 2007 (63.6%), the July 2008 rate is higher.
Employment rate in the National Capital Region (87.2%), Central Luzon (90.6%) and CALABARZON (89.6%) was lower than in all other regions. As in previous LFS, the National Capital Region recorded the lowest employment rate. In terms of the labor force participation rate, the NCR (61.7%), Ilocos Region (62.3%), Central Luzon (61.8%), CALABARZON (62.9%) and ARMM (57.4%) posted lower rates compared to the rest of the regions.
More than half (50.2%) of the total employed persons in July 2008, which was estimated at 34.6 million, worked in the services sector, with those engaged in wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods comprising the largest sub-sector (19.1% of the total employed). Workers in the agriculture sector comprised 35.0 percent of the total employed, with workers in agriculture, hunting and forestry making up the largest sub-sector (30.9% of the total employed). Only 14.8 percent of the total employed were in the industry sector, with the manufacturing sub-sector making up the largest percentage (8.5% of the total employed).
Among the various occupation groups, laborers and unskilled workers comprised the largest group, posting 32.4 percent of the total employed persons in July 2008. Farmers, forestry workers and fishermen were the second largest group, accounting for 17.7 percent of the total employed population.
Employed persons fall into any of these categories: wage and salary workers, own account workers and unpaid family workers. Wage and salary workers are those who work for private households, private establishments, government or government corporations and those who work with pay in own-family operated farm or business. More than half (52.8%) of the employed persons were wage and salary workers, more than one-third (35.3%) were own-account workers, and 11.8 percent were unpaid family workers. Among the wage and salary workers, those working for private establishments comprised the largest proportion (39.0% of the total employed). Government workers or those working for government corporations comprised only 8.1 percent of the total employed, while 5.4 percent were workers in private households. Meanwhile, among the own account workers, the self-employed comprised the majority (31.1% of total employed).
Employed persons are classified as either full-time workers or part-time workers. Full-time workers are those who work for 40 hours or more while part-time workers work for less than 40 hours. In July 2008, six in every 10 employed persons (65.2%) were working for 40 hours or more, while part-time workers were estimated at 33.8 percent of the total employed. Employed persons who express the desire to have additional hours of work in their present job or to have additional job, or to have a new job with longer working hours are considered underemployed. The July 2008 LFS placed the underemployment rate at 21.0 percent. This means that approximately 7.3 million employed persons were underemployed in July 2008. More than half (55.8%) of the total underemployed were reported as visibly underemployed or working for less than 40 hours during the reference week. Those working for 40 hours or more accounted for 42.7 percent of the total underemployed. Most of the underemployed were working in the agriculture sector (46.9%) and services sector (38.2%). The underemployed in the industry sector accounted for 14.9 percent.
The unemployment rate in July 2008 was estimated at 7.4 percent compared to 7.8 percent recorded in July 2007. Among the regions, the highest unemployment rate was recorded in the NCR at 12.8 percent. The next highest rates were posted in CALABARZON (10.4%) and Central Luzon (9.4%).
The number of unemployed was higher among males (61.7%) than among females (38.3%). By age group, for every 10 unemployed persons, five (51.8%) belonged to age group 15 - 24 years while three (28.5%) were in the age group 25 - 34.
Across educational groups, among the unemployed, the high school graduates comprised more than one-third (34.1%), the college undergraduates comprised about one-fifth (20.8%), while the college graduates, 19.5 percent.
Number: 2008-70 // Date Released: September 16, 2008
Source:Income and Employment Statistics DivisionHousehold Statistics DepartmentNational Statistics OfficeManila, PhilippinesPage last revised: September 16, 2008