Why job prospects for 2014 graduates remain dim despite growth

First published at The Philippine Online Chronicles

Another batch of over 500,000 college graduates will soon leave the halls of their academic institutions, eager to enter the dynamic world of work. But with Philippine unemployment rate rising to a nine-month high at 7.5 percent in January, will they have good chances of landing a job?

Getting a diploma is no assurance of getting employed immediately as the latest jobs data reveal that one-fifth (19.8 percent) of jobless Filipinos were college graduates, while 34 percent were high school graduates.

The latest jobless rate, which is an increase from last year’s 7.1 percent, could be even higher as the January labor force survey did not cover the provinces in Eastern Visayas that were heavily devastated by super typhoon Yolanda.

Jobless growth

The unemployment picture does not coincide with the Philippine economy’s strong performance, which is currently next only to China’s sustained growth. Last year, the country’s gross domestic product (GDP) surpassed projections as it grew by 7.2 percent.

Such jobless growth has baffled even President Benigno Aquino III, who pressed his Cabinet on the results on the action plan for poverty reduction. But a closer look at foreign capital flows may provide a hint why robust economic growth rates did not translate to more jobs for Filipinos.

Aside from overseas remittances, private capital flows are providing the added buoy to the Philippine economy, albeit on a temporary basis. Private capital flows include foreign direct investments (FDIs) and portfolio investments or hot money. Between the two, FDI has the potential to create jobs as portfolios are as good as fictitious capital.

Last year hot money inflows, which include stock market shares and bonds grew by 8 percent to $4 billion, the highest since 1999. This large amount money never crossed to the real economy, say for example to finance the construction of new factories or offices, as portfolio investors are interested in generating returns in the shortest time possible. On the other hand, FDI surged to 20 percent to $3.86 billion in 2013. More than half of this FDI went to debt instruments, meaning parent companies mainly lent to their local subsidiaries either to finance existing operations or for expansion.

Folly of FDI

But FDIs do not necessarily lead to job generation based on the Philippines’ experience. Think-tank Ibon Foundation noted that the cumulative FDI stock has doubled from US$10 billion in 1995 to $19 billion in 2007, yet the unemployment levels hardly changed.

“FDI supposedly goes towards building a strong productive economic base. However, there is nothing to indicate that all that FDI has contributed to creating a strong domestic economy able to create jobs on a sustainable basis. On the contrary, the number of jobless Filipinos has continued to rise, and the 2001-2008 period is already the worst eight-year period of recorded unemployment in the country’s history,” IBON Foundation said.

Such data on jobs and FDI dispute claims by those staunchly pushing Charter change (Cha-cha) which seeks to lift constitutional limits on foreign ownership.

FDI, if channeled to productive sectors, are also mostly going to manufacturing, transport and storage within special economic zones outside Metro Manila where wages are very low and where working conditions are dismal.

Questions from A Worker Who Reads

While checking our library for old issues of Datos (Ecumenical Institute for Labor Education and Research’s magazine), I stumbled into a 1991 issue containing messages of solidarity for EILER’s 10th anniversary. One of the messages was from a journalist named Karl Rossel based in Cologne, Germany. Rossel, a member of journalists’ collective Rheiniches Journalisten Buro, included some parts of Bertolt Bretcht’s beautiful poem “Questions of a Well-Read Worker” in his message to illustrate how the ruling class obliterates the role which workers and the masses played in the progress of empires and societies.

Who built the ancient city of Theben with its seven gates?

The books only mention the names of kings.

But did the kings carry along all the stones?

Where – in the golden city of Lima  – were the houses of craftsmen?

On the evening, when the Chinese wall was finished, where did the bricklayers go?

 

When Alexander conquered India, was he alone?…

Did he not even take a cook with him?

Philipp of Spain weeped, when his fleet was gone down?

Did nobody else cry?…

Every few years another famous man.

Who paid the costs?

So many reports

So many questions.”

Rossel said “people of EILER and the workers – well-read or not – ask questions like this,” adding that Filipino workers could have framed the questions in this way:

When the coconut and sugar plantation of landlords were built,

were there no Philippine peasants around?

When Mac Arthur “liberated” Manila in 1945, did no Filipino help him?

When Aquino talked about people’s power,

did she stop the military at Camp Crame and Camp Aguinaldo by herself?

How — in the  city where Malacanang Palace stands — do the workers live

and where are the houses of those who cannot even find work?

Every few years another president.

But who pays the costs?

So many reports.

So many questions.

How Brecht’s poem was localized by Rossel could not be any more better. Indeed, the role of the people in history’s progression is consistently stricken off from the books, to give more space for the exaggerated heroism of a select few. Such is the myopic and bourgeois perspective of history that looks at individuals rather than on throngs of people turning the wheels of change.

This is the same lopsided historical perspective which the Aquino government – and all other previous regimes – is guilty of. 

Every few years another president, another episode of deception, corruption, and economic sabotage. The people pays the costs.