Where are the promised jobs?
Where are the promised jobs of this administration? Part of it is gone with the TRAIN and inflation that decreased consumer demand.
From the labor force survey in October, the government reported that the country’s unemployment rate has gone up to 5.1 percent from 5.0 percent reported in the same month last year.
It could actually be much higher if not for the decline in the labor force participation rate as explained below.
The increase in the unemployment rate is proof of the negative effect of rising inflation this year that started with the imposition of the Train law and aggravated by the increase in the global price of oil and failure of the NFA to import enough rice to meet the deficit in local production.
Inflation averaged 5.2 percent from January to November this year, up from 2.8 percent in the same period last year.
Inflation, along with the increase in interest rates dampens aggregate demand, which in turn led to lower output or GDP growth.
Thus, it was not surprising that our GDP growth this year had slowed down from 6.6 percent in the first quarter to 6.2 percent in the second quarter and 6.1 percent in the third quarter.
It could be lower still in the fourth quarter.
The total number of population 15 years old and over comprise our working age group.
Our working age group had increased by 1.5 million in October this year to 71.886 million from only 70.380 million in the same month last year.
Of the total working age group in October this year, 60.6 percent, or 43.563 million, comprised the country’s labor force, down up by 142 thousand from 43.795 million in the same month last year.
The labor force as a fraction of the working age group is called the labor force participation rate (LFPR). The country’s LFPR was estimated at 60.6 percent October this year, down from 62.1 percent in the same month last year.
A lower LFPR means that many of those in the working age group are not joining the labor force.
The lower LFPR in October this year explains why there is a lower number of labor force in October this year than in October last year.
Now what explains the recent lowering of our LFPR?
In economics we learned that the LFPR is higher in good times because when the economy is looking good many would be enticed to join the labor force and look for jobs.
In bad times many workers would be discouraged from joining the labor force.
Those not in the working force includes students, the sick, the men in uniform, and the religious orders.
They also includes those who are simply on stand-by and not looking for work anymore for lack of employment prospect.
The labor force is divided into those who are employed and not employed.
Despite the lower LFPR and smaller labor force, the country’s total employment rate declined to 94.9 percent in October this year from 95.0 percent in October last year.
Consequently, total employment also decreased by 178 thousand in October this year to 41.341 million from 41.519 in October last year.
Lower employment rate also means higher unemployment rate.
The corresponding unemployment rate was 5.1 percent of the labor force in October this year, up from 5.0 percent in October last year.
As a result, the country’s total number of unemployed had also increased by 36,000 to 2.222 million in October this year from only 2.186 million in October last year.
Where are the promised jobs of this administration?
Part of it is gone with the TRAIN and inflation that decreased consumer demand.
Another part is gone with the increase in interest rates, which further dampened consumer demand and investment.
You can guess the rest.
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