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Essay: Understanding Underemployment and Unemployment Rates in CALABARZON

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  • Published: 1 October 2019*
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  • Words: 1,178 (approx)
  • Number of pages: 5 (approx)

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Unemployed are the people without a job but who are available to work to be paid or it is the act of doing something to find be employed but is always rejected because of the high qualification. The total number of persons in an economy who are involuntarily working in low-skill and low-paying occupations are only part-time because they are unable to find full-time positions that utilize their skills is known as underemployment. Many different things, including business cycles and economic recessions, can contribute to underemployment. The labor force alone, excluding those who are not looking for work, is used to compute the unemployment rate. Numerous factors can contribute to underemployment. Underemployment is a feature of the period before, during, and after a credit crunch when businesses reduce staff and let qualified workers go. In the recession brought on by the global financial crisis, the rate of underemployment increased to its highest levels. Around 64.8%, or 7.36 million people, of the estimated 11.35 million people in CALABARZON who are 15 or older are employed (See summary statistics). This indicates that 648 out of 1,000 people in the region who were 15 years of age and older were either employed or unemployed. The labor force participation rate (LFPR) increased by 3.3 percentage points from January 2021 to April 2021 and by around 6.5 percentage points from April 2020 to April 2021. The employment rate dropped by 0.3%. From 86.9 percent in January 2021 to 86.6 percent in April 2021, the employment rate (ER) marginally fell by 0.3 percentage points. Compared to April 2020’s ER of 83.3 percent. By 3.3 percentage points, it is higher. In absolute terms, this amounts to a rise in employment from 5.36 million in April 2020 to 6.37 million in April 2021.
Until they find another work, people who lose their jobs are unemployed. Most governments offer initiatives to aid jobless persons in their search. Prior to the 17th century, the word “employed” simply meant “be busy devoting oneself to something,” and the term “unemployed” was used to describe those who were not actively engaged in any activity but were instead taking advantage of their free time.
The unemployment rate fluctuates for a number of reasons. A change in the labor force’s size may have an impact on the unemployment rate, even though a change in the number of job seekers is the obvious cause. Workers exit the labor force when they lose hope and cease looking for work. The size of the labor force typically decreases (or increases more slowly than usual) during economic downturns since many people give up looking for employment and are no longer regarded as officially unemployed. Because of this, economists frequently point out that the unemployment number is deceptive and understates the fragility of the labor market. On the other hand, as more workers start seeking for work and re-enter the labor market during an economic recovery, high unemployment rates may continue even while there are more jobs available.
Underemployment refers to three categories of people: those who are actively seeking employment while unemployed; those who are forced to work part-time hours despite wanting full-time employment; and those who are considered marginally attached but have stopped actively seeking employment. These three groups work together to offer a more complete assessment of labor market slack. This measure excludes those who were forced to accept a position that was beyond their skill or experience level, such as the mechanical engineer who is a cab driver. At the moment, there are no statistics that monitor this kind of underemployment.
Underemployment is typically a problem for those who lack the finances or means to retrain. After the difficulties brought on by the COVID-19 breakout in 2020, the Philippine employment market is beginning to show signs of recovery. As most firms restored full operating capability after the protracted periods of lockdown, workers who unexpectedly lost their jobs started to cautiously return to their places of employment. Those who lost their jobs permanently were either actively hunting for new careers or were doing irregular jobs or gigs. However, given that the pandemic caused a significant reallocation of jobs across industries, considerations about job displacement, skills mismatch, and reduced salaries continue.
Furthermore, the number of unemployed people here in the Philippines is getting bigger, and some of the reasons are companies are focusing on the qualifications such as profile and background, and even experiences. The percentage of workers in the labor force who do not currently have a job but are actively seeking one is measured by the unemployment rate. This statistic excludes people who have not sought a job in the last four weeks. It’s critical to remember that the rate does not represent the total population; rather, it represents the percentage of job seekers who are unemployed and actively looking for work.
It is very evident that the pandemic or Corona Virus (CoVid-19) is a big factor in why the number of unemployed became higher and higher. And it is very evident that the number of professionals is getting increased and some of them are really striving to find the perfect job for them. According to the Australian Bureau of Statistics, 2020, in many parts of the world, unemployment increased to its highest level since the Great Depression as the COVID-19 pandemic began to spread. The unemployment rate in the United States rose from 4.4% to over 14.7% in just one month from March to April 2020, while it increased from 5.4 to 11.7% in Australia. Numerous quick-response economic measures were implemented in Australia, including a wage subsidy program (Jobkeeper) to help workers keep their staff members in the workforce, one-time payments to many welfare recipients, and a tripling of the standard rate of unemployment benefits (Jobseeker payment) through a new Coronavirus supplement payment. In July 2020, when this article was written, several nations, including Australia, are still in the depths of a health and economic crisis. That means that Covid- 19 is the reason why they have to filter the employees that they have to hire regardless the health status of everyone.

In this work, a mathematical model for predicting and estimating the unemployment rate in the Philippines is being developed. Additionally, among the variables taken into consideration, including the labor force participation rate, population, inflation rate, gross domestic product, and gross national income, characteristics that potentially predict unemployment must be identified. The pairwise Granger-causality test and the Johansen Cointegration Test are also used to assess the Granger-causal connection and integration between the dependent and independent variables. The Philippine Statistics Authority, National Statistics Office, and Bangko Sentral ng Pilipinas provided the information utilized. SARIMA (6, 1, 5) (0, 1, 1) 4 has been developed as the Box-Jenkins method’s forecasting model for the unemployment rate, and it has a coefficient of determination of 0.79. The model’s projected values match the actual values in 99 percent of cases, while the real values are only 72 percent far from the expected ones. The findings of the regression analysis show that the labor force participation rate and population have a considerable impact on the unemployment rate. Population, GDP, and GNI among the independent variables demonstrated a granger-causal association with unemployment. Additionally, it is discovered that the dependent and independent variables exhibit at least four cointegrating relationships.

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