By Geoffrey M. Ducanes
AS WE CELEBRATED Labor Day, it seems a cruel irony that working class families in the country and in most of the world, especially those living under a lockdown, are currently experiencing perhaps the most difficult period in their lives.
Labor Day is intended to be a celebration of the working class and what they fought for (and gained) and what they continue to fight for in employment conditions. It has its origin in the commemoration of a violent confrontation between workers, who were striking for an eight-hour work-day, and policemen in the city of Chicago in 1886 that resulted in the death of some workers and policemen.
WORKING CLASS
The “working class” is variously defined but one definition tags them as the “social group that consists of people who earn little money, often being paid only for the hours or days that they work, and who usually do physical work.” Excluded from the working class are employers, self-employed workers, and among employees – professionals, associate professionals, those in managerial positions, as well as those in other occupations who are on permanent status and paid monthly.
By this definition, 46% (around 19 million) of all Filipino workers belong to the working class, based on the Philippine Statistics Authority’s (PSA) Labor Force Survey in October 2018.
JOBS OF THE WORKING CLASS
The largest groups of working class jobs in the country are farmhands and laborers, shop salespersons and market vendors, construction workers and carpenters, public transportation and delivery drivers, and waiters and waitresses, among others.
They are among the most likely to have lost jobs due to the enforced lockdown. And because many of them are not reported by their employers to the Social Security System or the Bureau of Internal Revenue, they are unlikely to get aid from the Department of Labor and Employment.
Among the poorest half of households in the country, close to 60% have working class jobs. Most of the rest are in low-earning self-employment as farmers or as low-end service providers. Majority are in the informal sector.
Collectively, they are the ones likely not to have any savings buffer, have a large family, and not own private transportation, all of which raise the hardship of the lockdown. Median family size for the poorest half of households in the country is five compared to only four for the richest half.
LACK OF SOCIAL INSURANCE FOR LOW-INCOME HOUSEHOLDS
Their hardship is compounded by their lack of access to social insurance and protection. Even as household official poverty incidence in the country declined from close to 20% in 2012 to 12.1% in 2018, social protection for low-income households apart from the Pantawid Pamilyang Pilipino Program and Philhealth, remains weak.
Based on the PSA’s 2017 Annual Poverty Indicators Survey, only 20% of employees belonging to the poorest half of households are enrolled either in the Social Security System (SSS) or the Government Service Insurance System. This figure goes down to 13% when looking only at the poorest 30% of households.
Among self-employed workers belonging to the poorest half of households, the rate is even lower at only 9%, and only 7% among the poorest 30% of households.
This means they have no access to loans from these institutions or the unemployment benefits promised by SSS to its members who lose their jobs due to the economic fallout from COVID-19.
There is other evidence of the low level of social protection for the poor from the same data: only 3% of those in the poorest 30% of households said they benefited from the government’s supplemental feeding program; and less than one percent reported benefiting from the government’s sustainable livelihood programs.
BOOSTING SOCIAL PROTECTION FOR WORKING CLASS AND INFORMAL SECTOR
If nothing else, the current crisis reminds us of the need to raise social security and social protection for the working class and other vulnerable workers.
At the very least, Republic Act 8282 and the compulsory coverage in SSS of all private sector employees not over 60 years of age should be strictly enforced. The current crisis has shown it is the employees who bear the brunt of their non-coverage, which is the responsibility of their employers.
For self-employed informal sector workers who earn low income, the government should consider subsidizing their participation in a social security scheme. This would incentivize their registration — the lack of list of informal sector workers was a hindrance to helping them during this lockdown, which will make it easier to fold them into the formal sector later on.
More broadly, the feasibility of a more expansive unemployment insurance scheme, such as in other ASEAN countries like Malaysia, Thailand, Vietnam, and even Lao PDR, together with how it can be financed, should be discussed. The possibility of a guaranteed basic income, if not for the entire population then for a subset of the population, especially during the difficult months ahead should also be examined.
Geoffrey Ducanes teaches at the Ateneo de Manila University Department of Economics.
