HOME > Selected Writings > Press Release No. 99-3

Press Release No. 99-3
15 March 1999

High unemployment, higher prices
and lower wages

What kind of recovery is the government claiming in a situation of high unemployment, higher prices, and lower wages for workers?

The job situation has taken its turn for the worse as most of those who are currently unemployed are in the prime of their life, so to speak.

Latest statistics from the Department of Labor and Employment (DOLE) show that 2.8 million people are unemployed. Of this number, a little more than 70% are those aged 15 to 34 years old.

The DOLE reports that as of January 1999, the unemployment rate rose to 9.0% as compared to 8.4% during the same period last year.

It is also interesting to note that underemployed Filipinos are pegged at 22.1% in January 1999, a slight increase from last year’s 21.6 percent.

While 28.4 million workers are currently employed, own-account workers comprise a substantial 10.6 million.

This figure implies that roughly 37% of employed Filipinos are forced to rely on themselves to eke out a living due to limited job opportunities.

No less than the Employers Confederation of the Philippines (ECOP) admitted that the unemployment rate could still be higher by April when new graduates are added to the labor force.

As if these are not enough, data from the Department of Trade and Industry (DTI) show that prices of basic commodities are increasing in the National Capital Region (NCR)

While the prices of rice and pork have remained stable, dressed chicken increased by 33% and the price of cooking oil rose to 36 percent. Meanwhile, refined sugar and brown sugar increased by 36% and 39% respectively.

There were also substantial increases in the prices of sardines, coffee, laundry soap, luncheon meat, processed and canned beef, toilet soap and instant noodles.

Amidst the high unemployment rate and even higher prices of commodities, the Employers Confederation of the Philippines (ECOP) is now calling for a wage freeze for one year due to the economic slump which resulted in high production costs for companies operating in the country.

The legislated daily wage rates currently range from P131 (ARMM) to P198 (NCR).

According to IBON computations, the minimum wage for Manila-based workers fulfills only 45% of living cost requirement for a family of six, which is pegged at P441.06 (NCR). The same is true for those outside the NCR as the daily cost of living is computed at P334.55 (agriculture) and P355.27 (non-agriculture).

An ECOP representative, in a TV interview, stressed that workers should now have a choice between low wages or no job at all.

A wage freeze is said to be the "lesser evil" since this will result in lower production cost and could assuage the difficulties being experienced by financially distressed companies.

Indeed, employers see workers as expendable appendages in their production.

They fail to see that the economic crisis is structural in nature, where high production cost is brought about by, among others, import-dependence and the lack of basic industries and technology transfer that can facilitate higher value-added output for local raw materials.

Their adherence to globalization thrusts has resulted in an economy dominated by local big business and transnational corporations. Globalization has also brought about widespread closure of local establishments due to the emerging cutthroat competition and the big players’ quest for superprofits.

The 1998 statistics alone show that 3,072 establishments resorted to closure/retrenchment, affecting 155,198 workers. Compared to 1997 data, the 1998 figures already constitute a 166% increase in the number of establishments and a 147% increase in the number of workers affected.

The figures are indeed alarming and revolting, to say the least. It becomes incumbent upon the Estrada administration to live up to its promise of alleviating poverty, for its continued adherence to globalization proves to be a bane to the poor people it has vowed to serve.

Labor Force Indicators
(number in thousands)

Source: DOLE

Prevailing Prices of Selected Commodities, NCR
February 1998 and February 2, 1999

Source: DTI

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