PHL has highest incidence of part-time work in Asean

from October 12, 2017 01:00 am to October 12, 2017 01:00 am

The Philippines has the highest percentage of part-time workers in Asean, again putting a spotlight on the need to improve labor rights and security in the country, just like the campaign promise of President Duterte to end contractualization, according to the International Labour Organization (ILO).

Data obtained by the BusinessMirror from the ILO showed that 16.4 percent of workers in Philippine small and medium enterprises (SMEs) render less than 30 man-hours a week. The ILO noted that the practice of hiring part-time workers is common among firms engaged in industries that follow certain economic cycles, such as retail, agriculture, construction and tourism.

“Basic protection is necessary for workers’ security and to uphold effective levels of established rights. Maintaining the balance between the need for labor flexibility and workers’ rights protection is a challenging issue, especially during the recent period of macroeconomic uncertainty,” the report read.

Based on 2015 data provided by the Philippine Statistics Authority (PSA), there are 900,914 establishments in the Philippines. Of these, 99.5 percent (896,839) are micro, small and medium enterprises (MSMEs) and the remaining 0.5 percent (4,075) are large enterprises.

MSMEs generated a total of 4,784,870 jobs in 2015 versus 2,981,819 for the large enterprises. This indicates that MSMEs contributed almost 61.6 percent of the total jobs generated by all types of business establishments that year. Of these, 29.4 percent were generated by micro enterprises, 25.3 percent by small enterprises and 6.8 percent by medium enterprises. By industry sector, MSMEs in the wholesale and retail trade; repair of motor vehicles and motorcycles generated the most number of jobs.

Duterte, during the campaign period, rallied workers to his side when vowed to end illegal contractualization, or commonly known as endo. Duterte, months after assuming the presidency, asked the labor sector to submit a draft executive order (EO) to implement his promise. Up to now, however, the EO still gathering dust in the Palace, making labor groups lose hope that it would still be implemented.

The ILO data showed that the percentage of total employees that work part-time in Myanmar, Vietnam, Indonesia and Malaysia was lower at 5.4 percent, 5.9 percent, 8.6 percent and 1.6 percent, respectively.

Data showed, however, that compared to Asean countries, the percentage of total employees who go overtime, or work over 48 hours a week, is lowest in the Philippines at 18.6 percent.In Asean countries, like Myanmar, Vietnam, Indonesia and Malaysia, the incidence is higher at 55.3 percent, 34.9 percent, 25.5 percent and 22 percent, respectively.

The ILO said allowing workers to render less than 30 man-hours a week or more than 48 hours a week is a business strategy termed as “numerical flexibility”.

“Numerical flexibility refers to a process through which firms adjust the volume of labor in terms of the number of workers or hours worked,” the ILO said in its report, titled “World Employment and Social Outlook 2017”.

“This type of flexibility is particularly relevant for firms with an urgent requirement to reduce labor costs [arising from a need to engage in price competition] or other short-term oriented strategies driven by external factors,” it added.

But the ILO said relegating workers to part-time work is more common among developed economies compared to emerging economies like the Philippines.

Data showed the mean share of employees working less than 30 hours per week is 21 percent in developed economies, compared to 7.8 percent in emerging economies.

ILO said firms in emerging economies are more likely to use overtime arrangements than firms in developed economies.

The report stated that the mean share of employees working more than 48 hours per week is 18.3 percent in emerging economies, compared to 12.4 percent in
developed economies.

The ILO also said job dynamics among young firms in terms of full-time permanent employment have also weakened since the global financial crisis.

The United Nations’s only tripartite agency said full-time permanent employment growth rate among young firms was on average 6.9 percentage points higher than for established firms during the precrisis period. But this declined to 5.5 percentage points in the postcrisis period.

“This change reflects developments in the overall business environment, whereby new and younger firms have been shedding jobs at a much faster pace than before,” the ILO said.

The report also noted that innovation is an “important source” of competitiveness and job creation for enterprises. Innovative firms in general tend to be more productive, create more jobs, employ more educated workers and offer more training, as well as hire more female workers.

The ILO said, however, innovation has led to more intensive use of temporary workers, particularly in firms with product and process innovation, and to higher concentration of women in temporary employment.

For example, ILO said firms implementing product and process innovation tend to employ more temporary workers than non-innovators by over 75 percent.

Trade and engagement in global supply chains are also important stimuli for job creation and productivity growth. As trade has stagnated in recent years, so too has trade-related employment.

In 2016 37.3 percent of workers were employed in private formal exporting firms. This share is lower than the precrisis share of 38.6 percent. The report noted that trading firms have higher productivity and pay higher wages than those firms not engaged in trade.