Work and Well-Being

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Work is perhaps the most vital component of human development. Immediately it means income and survival. But with it also comes self-worth, social recognition, and healthy mental and emotional state. It is essential to well-being both as a means-to-an-end and as an end-in-it-self. In the Philippines, one’s access to goods and services depends on income. With most Filipinos owning little more than their ability to work, their incomes consist largely of wages and salaries. Hence the incomes of the majority will clearly depend on the amount of employment they can find and the value society places on their effort.

The high incidence of poverty in the country however is not directly caused by high unemployment, nor the poor predominantly represented by the unemployed. Poverty in the Philippines is associated primarily with a low quality of employment. Many factors influence the quality of employment. These are: (1) the overall rate of economic growth; (2) the total amount of human resources that the economy must absorb; (3) the changing requirements and nature of jobs, as markets and technology affect different economic sectors, and (4) the skills and abilities of the country’s labor force.

The government has important roles to play in the education-labor market. Foremost among these is the adoption of macroeconomic and sectoral policies that will place the economy on the high road of income and employment growth.

At the level of the working household, education is the most powerful determinant of earnings, whether in the form of wages or of total family income. This underscores the importance of providing the poor with access to quality basic (elementary and high school) education, which today is largely in the hands of the public sector.

This especially includes encouraging a high level of investment through the provision of physical infrastructure (which implies in turn that government must resolve its perennial financial and fiscal dilemma); aggressively pursuing a long overdue policy on population that provides the people with enlightened and effective reproductive choices; and averting the destabilization caused by political upheavals by drawing substantive democratic demands and competing social claims within the orbit of constitutional democracy.

In terms of sectoral policies, government should pursue and make good its thrust to revitalize and modernize agriculture and the rural areas first and foremost, making it an effective absorber of labor. Well-known measures of crop-diversification, multi-cropping, irrigation, programs of research, extension, and credit must be combined with the rapid resolution if outstanding property rights disputes and agrarian reform. In the meantime, the national bet on new services and global export industries should be continued through a continuous program to encourage quality improvements in private tertiary education and through a few carefully planned public investments in R&D in public and private centers of excellence. Credit and other programs that support domestic small and medium industries should be revitalized, with the potential to make the leap towards global supply.

At the level of the working household, education is the most powerful determinant of earnings, whether in the form of wages or of total family income. This underscores the importance of providing the poor with access to quality basic (elementary and high school) education, which today is largely in the hands of the public sector. Quality basic education also implies sufficient preparation for the option to pursue decent working careers that do not require further investments in costly tertiary education. Creating social esteem and status for skilled manual labor, technicians, and other blue-collar work will require an environment of growth in employment and wages in those categories plus conscious efforts to set clear quality standards and surpass them. In accomplishing these tasks, government must (a) gradually withdraw from its overextension in tertiary education, yielding to the private sector; (b) focus its attention on uplifting basic education, as discussed in detail in the 2000 issue of this Report; and (c.) yield technical training to the private sector and instead concentrate on its more important role of certification of skills and controlling the the quality of technical institutes; (d) institute a system of high school vouchers, university scholars, and loan study programs targeted narrowly at the most brilliant among the poor.

Efforts of organized labor to take a larger development role beyond collective bargaining and tripartism should be supported. These include organized labor’s attempts to promote employment, provide labor-market information, and raise productivity; the formation of craft unions that also aim to raise the skill-levels of members; the formation of small businesses or cooperatives among home-workers or domestic outworkers; reduction of the legal malaise in labor relations and the resort to more expeditious mechanisms to settle disputes; and here applicable the use of schemes like profit-sharing and bonuses that align incentives with productivity.

The workers’ savings in the social insurance funds must henceforth be protected from political influence. In their bid to raise members’ contributions to preserve the viability of these funds, serious consideration should be given to the possibility of also expanding benefits to include limited forms of unemployment benefits. These not only justify the increase in contribution but also serve to facilitate worker mobility.

Foreign labor markets have now become important regular employers of Filipino labor. Overseas work should thus be recognized for its contribution to employment and income and should be encouraged. The government should eventually move away from direct placement of workers and leave this to private institutions. Domestic government intervention should mainly take the form of facilitating reliable information, standard-setting and rationalization of private placement agencies, encouragement of private insurance and pension plans for overseas workers, and protection of workers; interests abroad.

The problem of child labor cannot be addressed in isolation from laying the conditions for sustained employment growth, the generation of regular and productive jobs, progress in reducing family sizes, and changes in the priorities in the education system. Poverty-alleviation programs with implicit contracts for school-attendance and performance, school feeding programs, and provision of education infrastructure in well chosen areas will also be effective in reducing the likelihood that children interrupt their schooling for work.

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Cover Page
Foreword and Acknowledgement
Table of Contents
Chapter 1 – Work and Well Being
Chapter 2 – Human Development, Human Poverty and Gender Equity
Technical Notes