Catastrophic Loss in Jobs and Work Hours: Save the MSMEs and Protect the Workers

| Posted by UP Media and Public Relations Office

Statement of the UP School of Labor and Industrial Relations on the COVID-19 crisis impact on labor and call to action
8 June 2020

About 8 million Filipinos lost their employment in the first quarter of 2020 compared to the first quarter of 2019 corresponding to a decline in the number of employed from 41.8 million workers to 33.8 million workers (April 2020, Labor Force Survey, Philippine Statistics Authority). Moreover, for the majority of those who managed to stay employed, they do so at less than the standard 48-hour workweek. The percent of workers who worked at least 48 hours a week dropped from 68 percent in the first quarter of 2019 to 28 percent in the first quarter of 2020 or a decline by 18.6 million full-time workers. Of the 23.6 million part-time workers as of April 2020, 17.3 million cited the COVID-19 lockdown as the reason for working less than the standard workweek. Equally disturbing is the sharp decline in the labor force participation rate from 61.3 percent in April 2019 to 55.6 percent in April this year, the lowest since the 1970s and translates to 3 million less Filipinos in the working ages that are participating in the labor force.

More catastrophic losses in both jobs and work hours are expected in the second and third quarters of 2020 in view of: (a) the expansion of the lockdown from Luzon in mid-March to virtually the rest of the country by early April 2020; (b) the extension of the community quarantine until a vaccine against COVID-19 is available and made more widely accessible; and (c) the influx of tens of thousands of displaced overseas Filipino workers.

In the provision of the proposed 1.3 Trillion pesos economic stimulus package, we call on the government to ensure priority to both the economic recovery of the Micro, Small and Medium Enterprises (MSMEs), which comprise 99.5 percent of total business establishments, and the protection of their workers which account for 63.2 percent of all workers in the country, by providing higher financial incentives (e.g. zero-interest soft loans, deferment of loan payments for a year without penalties, wage subsidies for regular employees, etc.) to MSME employers who will keep at least the same level of employees before the lockdown and regularize their employment. We call on the government and employers to effectively involve trade unions and workers’ representatives in the crafting and implementation of any programs and adjustment measures that address economic and business recovery.

The imposition of the lockdown to contain the spread of the corona virus has inflicted the most severe damage upon the informal workers (e.g. tricycle and jeepney drivers, street vendors, own-account workers, etc.) who, without work and social security protection, were deprived of the means for survival for themselves and their families. We call for the immediate passage of the Magna Carta for Workers in the Informal Economy, which mandates the State to uphold decent work standards for the informal workers.

Finally, where the crisis has stripped most workers of their capacity to earn subsistence incomes, it becomes incumbent upon the State to adopt bolder and effective social reform measures. At the height of the Global Depression in the 1930s, then US President Franklin Roosevelt acted swiftly to curb economic paralysis by enacting the New Deal program of massive job creation through public works that was supplemented by the passage of laws recognizing the right of workers to associate and bargain collectively. Similarly, the then Philippine President Manuel L. Quezon made a bold response by launching a Social Justice Program and establishing the Department of Labor for the protection of labor. We call on the government to take a swift and bold action for social reforms that are necessary to prevent the COVID-19 crisis from morphing into a national human and economic crisis, and to build social cohesion and solidarity through consultation and social dialogue with all affected sectors, including the organized and unorganized workers.

This statement was originally posted on the UP School of Labor and Industrial Relations Facebook page.