CHAPTER 8: LABOR AND EMPLOYMENT Human resources are the key to economic development.

What
the people consider to be important goals in their lives how they think about work, how creative or
skillful they are, how intelligent and motivated they are — will determine whether their country will
develop or not. The other economic resources like land and capital assume their importance only insofar
as people make use of them. Oil is a very important economic resource, but as long as it remains in the
bowels of the earth, it just remains dormant. It becomes a useful and precious resource only when man
drills it out, refines it, and distributes it to the end users. Machines assume importance only when they
are intended to function and serve man's work. Thus, the notion that a country's natural resources are
the key to its development is fallacious. Labor is a very important resource. It is so important that some
noted economists postulate that labor is the source of the important hypothesis and principles
economists have developed about labor. Although not all of them have been tested and accepted, they
represent an index of what should be known about labor problems and labor markets. Labor Problems
Labor problems represent conflicts on ideals that normally rise out of employment. Unemployment is a
classical example. Most people that those who want work and are capable of working should have jobs.
A problem would exist if people could not find the job that they had been preparing for. Unemployed
people are, thus, considered part of the labor problem. When we talk of labor problem, we are referring
here to a working relationship which is considered below the ideal. Many of our workers sent to the
Middle East countries are doing well in their jobs. They can, thus, send part of their income to the
Philippines for the support of their families here. Contracts between the workers and the contractors
are facilitated by the government agencies. Now, if some unscrupulous employment agencies fleece
applicants and run away with the money intended for application fees — a labor problem occurs. Those
who take part in employment relationships must work, out mutually satisfactory arrangements. Among
the things that have to be determined are the part individual workers have to play: their responsibilities,
privileges, opportunities, etc. in return for the payment given by the employers. The employers, in turn,
must clarify the terms of agreement. A mutually satisfactory arrangement spelled out from the very
beginning would lessen labor problems. The government and the private sectors have the capabilities to
provide employment opportunities to members of the labor force who are looking for work. If both the
government and the private sectors cannot adequately provide this need, then a big labor problem
exists. AREAS OF LABOR PROBLEMS Unemployment and Underemployment An individual suffers
economic and social dislocation if he is unemployed. A person is considered unemployed if he is at least
15 years old, willing and able to work, but cannot find work. Unemployment rate in excess of 6 percent
of the labor force represents an emergency situation and should be remedied right away. There has
been some misunderstanding among researchers and economists regarding the definition of
unemployment rate. As an example, consider the employment figures published by the National Census
and Statistics Office (NCSO) for 1982 which showed the Philippine unemployment rate to be 5 percent.
Quite apart from the question of underemployment, it would seem implausible that in the middle of the
recession, the Philippines posted a figure close to what may be considered full employment in the
United States or the United Kingdom, respectively. The explanation is to be found in the definition of
"employment": anyone who worked one hour in the preceding three months is considered employed. In
1976, the reference period was changed from "the fast week" to "the past quarter". Moreover,
employment was expanded to include such activities as home gardening and raising poultry, as long as
there was a harvest. These changes effectively increased the numerator of the employment rates. The
base ofthe employment rate, which is the labor force, was also changed. Where before the labor
included the population 10 years old or over, who were either employed or looking for work, the cutoff
age was changed to 15 years, thus reducing the size of the denominator. All these changes tend to
reduce the unemployment figure. For our purposes, however, we consider a person unemployed if he is
at least 15 years old to work, but cannot find work. As previously stated, unemployment rate in excess
of 6 percent of the labor force represents an emergency situation and should be remedied right away.
Unemployment is not only considered an economic problem (loss of job, lack of income, inability to feed
one's family, etc.) but is also a social problem. Unemployment can lead to petty crimes or outright hold-
ups or robberies. It can also lead to social dissatisfactions. The government must, therefore, place the
problem of unemployment among it, first priorities. Figure 48 shows that the government has had a
hard time increasing employment and reducing unemployment Underemployment is another problem.
An Underemployed is an employed person who works for less than 40 hours per week, despite the fact
that he wants to work for more hours. Underemployment exists in some part-time work (for example,
jeepney drivers who work in shifts) and in substantially large agriculturally based jobs.
Underemployment is further subdivided in two: visible underemployment and invisible
underemployment. Visible underemployment is defined as people working less than 40 hours per week
and wanting additional work. Invisible underemployment is defined as the number people working 40
hours or more per week and still wanting additional work. The street cigarette vendors, for example, are
invisibly underemployed. They work for more than 8 hours per day or 40 hours per week yet still want
additional hours of work to augment their meager income.