Choosy job seekers, labor mismatch, atbp.

Professor Ofreneo is a member of the management collective of Action for Economic Reforms.  This article was published in the Opinion Section, Yellow Pad Column of BusinessWorld, April 3, 2006 edition, page S1/5.

The economy, say government officials, has been growing robustly and that the one-million-jobs-a-year target is fully attainable.  If the unemployment figures still appear high, industry and labor officials claim that this is not because there is a scarcity of jobs, for thousands of  jobs  are out there in the labor market—unfilled.  It is either Filipinos are too choosy about jobs or job seekers have not invested enough on education and skills formation to be able to match the unfilled jobs.

The first observation is simply flippant.  For if this were true,  how come a job opening for a janitorial position generates as much as 300 or more job applicants, with some applicants even carrying their college diplomas? Try asking the Civil Service Commission or the organizers of job fairs, composed mostly of recruitment agencies seeking to beef up their stand-by “manpower pools.”  Or better still, try queuing in a job fair at SM Mega Mall.

Of course, there are a few blessed souls who can afford to be choosy and kill time while waiting for the “right” jobs to come their way.  These are the children of elite families who feel the education they got from elite schools entitles them to some high-paying secure jobs. Unfortunately, for some of them, the waiting can be very long and the “right” jobs may not be forthcoming at all.

But for the many who cannot afford to wait, they grab whatever jobs are available, menial or low-paying though they may be, for the logic is that they have to accumulate “work experiences” while invisibly “queuing” for the few good jobs in the shrinking formal sector.  For those who are young and yet desperate to get work, there are two major places to go—the 5-5 labor market and the nocturnal labor market.

The 5-5 labor market is lorded over by the thousands of manpower agencies, who provide companies and businesses nationwide with “temporary” workers on a project-hiring basis, usually good for not more than five months in order to avoid the six-month regularization rule. The “repeaters” in the 5-5 labor market explain why the public employment service offices (PESOs) are able to report a million or so of jobs “generated” year by year.

The nocturnal labor market attracts desperate young women and men with the right looks.

Of course, there is the phenomenal call center industry, where work is also done at night, to service American and European customers in their waking hours.  From a handful of companies employing a few thousand agents in 2000, the call center industry has expanded today into over 100 companies with more than 100,000 agents.  Weekly, the newspapers carry huge wanted-agent ads running into several pages.  If there are thousands of unfilled call center seats, the ineluctable conclusion is that there is a huge labor mismatch—we have college graduates who do not possess the right English and communication skills to land a call center job which pays twice or even thrice the minimum wage.  At the moment, for every 100 applicants, only two to three get accepted (however, only one stays on the job because the repetitive, dedicated night work in a cold environment is deadly on both the body and the patience of  an agent).

But five years ago, when the graduates of today were registering in college, did they have the call center industry in mind?  As to those who took up IT courses in the l990s, did they have the prescience to see that electronics jobs would melt down in 2000s?  And how about those who took up education and other courses in the l980s and who are now working as homemakers and caregivers in Hong Kong, Singapore, Kuala Lumpur and the cities of North America, Europe and the Middle East?

Which brings us to a bigger labor market concern—a shrinking formal sector because we have an eroding agro-industrial base.  Countries usually plan and draw up college and technical-vocational education programs in support of their growing home industries, whether they are export-oriented or not.  However, statistics show that the Philippines is  the only Asian country whose industrial and agricultural sectors have stagnated in the last three decades, no thanks to the structural adjustment program (SAP) espoused by the World Bank and  a narrow group of like-minded economic technocrats.

The formal and informal sub-sectors of services are the only ones continuously growing; the formal, with the help of remittances of overseas Filipino workers; and the informal, as a catch basin for those either unable to land or are expelled from the narrowing organized sector of the economy. Between l999 and 2003 alone, the Employers Confederation of the Philippines reported that formal sector employment shrank, from 6 million to 5.1 million, while the informal sector absorbed two million more workers in the same period. These observations are buttressed by recent labor statistics showing growth in the number of “unpaid family workers” and the continuous decline of manufacturing employment.

Given the limited job opportunities in the formal sector at home, many Filipinos aspire to get jobs overseas, even if the jobs being offered belong mostly to the 3D category (dirty, dangerous and difficult).  However, the overseas labor market is highly selective, meaning those with work experience and skills (with the notable exception of some occupations in the entertainment sector) are the ones being recruited. Thus, it is not true that those who go overseas are the unemployed; those who leave the country are mostly the experienced workers who have marketable skills.

Lately, such selectivity has created difficult problems for the shrinking formal sector at home. The health sector and the aviation, power, steel, petrochemical, accountancy, electronics and other industries have been losing “mission-critical” professionals whose skills and talents are crucial in making these industries going concerns. Can you have hospitals without doctors and nurses, and an aviation industry without pilots, maintenance engineers and air controllers?

The solution offered by the government to the outflow of these mission-critical personnel is seductively simple—more training.  But it takes years to develop skilled professionals needed by these industries (and a decade in the case of the pilots), while it takes only a few weeks for aggressive foreign poachers to organize the departure of these mission-critical personnel, even if most of these professionals have existing “voluntary” or employment contracts with their local employers.  In the meantime, what will the helpless industries do? Wait for several years until the graduation of a new crop of skilled and experienced personnel?

Or pack up and invest in other countries?

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