‘PH at risk of prolonged low wages, high unemployment’

MANILA, Philippines – Low wages and high unemployment in the Philippines could continue should weak global trade persist or worsen in the coming years.

In the latest Trade and Development Report, the United Nations Conference on Trade and Development (Unctad) said despite the country’s economic growth in the past 20 years, employee wages have remained low causing the gap between the rich and the poor to deepen.

Unctad said with a risk of prolonged sluggish global demand, this could displace workers in the manufacturing sector to the informal sector, where employees do not get high pay and stable working conditions.

“Over the next few years, there is a risk that these countries’ employment and wage opportunities will be adversely affected by a probable prolonged decline in global aggregate demand and that the workers displaced from manufacturing sector will move to low-productivity activities, or even to informal services or unemployment,” the Unctad said.

Protect wages, use safety nets

To help workers, the Unctad recommended that minimum wages be set, and workers be protected by implementing safety nets. The UN agency said the government must create more jobs and spend for safety nets to keep workers from falling into poverty.

The report suggests that policymakers need to reduce inequality, which could promote growth and employment creation.

These will help ensure that Filipinos will receive stable incomes amid crises, prevent the poor from falling deeper into poverty, promote inclusive economic growth, and ensure jobs generation for years to come.

It can be noted that in 2009, there were 23.1 million poor Filipinos or 3.86 million poor households. In terms of unemployment, some 2.8 million Filipinos were out of work as of April 2012.
 
“A fundamental policy reorientation is needed, recognizing that healthy and inclusive growth will require a stable expansion of consumption and investment in productive capacity based on favorabe income expectations of the working population and positive demand expectations of entrepreneurs. This requires a rethinking of the principles underlying the design of national economic policy and supportive international institutional arrangements,” Unctad said. – Rappler.com