LABOR IN THE PHILIPPINES: WAGES, UNIONS AND OUTSOURCING

LABOR IN THE PHILIPPINES

Labor force: 41.33 million (2013 est.), country comparison to the world: 16 Labor force - by occupation: agriculture: 32 percent, industry: 15 percent, services: 53 percent (2012 est.). GDP - composition, by sector of origin: agriculture: 11.2 percent; industry: 31.6 percent, services: 57.2 percent (2013 est.). Unemployment rate: 7.4 percent (2013 est.), country comparison to the world: 81; 7 percent (2012 est.). [Source: CIA World Factbook]

In December 2005, the unemployment rate was 7.4 percent, much lower than the roughly 11 percent average typical since the mid-1980s. The improvement was attributable to electronics exports, the end of drought conditions for agriculture, and growth in business outsourcing, real estate, and tourism. Some 32.9 million people were employed out of a total workforce of 35.5 million. However, the underemployment rate was 21.2 percent. In 2004 about 48 percent were employed in services, 36 percent in agriculture, and 16 percent in industry. Reflecting the lack of satisfactory employment opportunities at home, an estimated 652,000 Filipinos obtained employment outside the country as contract workers. About 4 million workers belong to trade unions, which are particularly prevalent in manufacturing. Labor relations generally are good because of the strict enforcement of labor laws and the acceptance of collective bargaining. 16 However, in 2003 some 38 new strikes, mostly attributable to unfair labor practices, led to the loss of 156,000 workdays, less than half the level in the previous year. [Source: Library of Congress, 2006]

A high rate of population growth, lack of access to land, insufficient job creation in industry, and a history of inappropriate economic policies contributed to high unemployment and underemployment and a relatively high proportion of the labor force being in low-productivity, service sector jobs in the late 1980s. Real wages were low, having declined at about 3 percent per year since 1960, and relatively weak labor unions were unable to substantially affect the deterioration of workers' earning power.

The Philippine workforce is highly educated. Some 61 percent of Filipino workers have high school diplomas and nearly 32 percent have university degrees. Ranking of education systems and worker productivity in Asia by Hong Kong-based Political and Economic Risk Consultancy: 1) South Korea; 2) Singapore; 3) Japan; 4) Taiwan; 5) India; 6) China; 7) Malaysia; 8) Hong Kong; 9) the Philippines; 10) Thailand; 11) Vietnam; 12) Indonesia

According to everyculture.com: Agriculture, forestry, and fishing are the occupations of 40 percent of the thirty million people who are employed. Light manufacturing, construction, mining and the service industries provide the remainder of employment opportunities. Fifty percent of the population lives below the poverty line. It is not uncommon for people to "volunteer" as workers in the health care field in hopes of being chosen to work when a position becomes available. People work seven days a week and take additional jobs to maintain or improve their lifestyle or pay for a child's education. Hundreds of thousand citizens work overseas, primarily as merchant seamen, health care, household, or factory workers in Saudi Arabia, Hong Kong, and Taiwan. Over Seas Workers (OSWs) have a governmental agency that looks after their interests. Laws govern hours of work, insurance coverage, and vacation time, but workers may be exploited and mistreated. Recruitment centers are found in all large municipalities. OSWs send $7 billion home each year, providing 4 percent of the gross domestic product. [Source: everyculture.com]

See Separate Article OVERSEAS FILIPINO WORKERS

Employment Patterns and Traditions in the Philippines

According to everyculture.com: In rural areas, lack of mechanization causes the entire family to work in the rice fields. Planting rice seedlings, separating them, replanting, and changing water levels in the fields are done by hand and are labor-intensive. Crops such as tobacco, corn, and sugarcane demand full family participation for short periods during the planting and harvest seasons. In the cities, traditional roles common to industrialized countries are followed. Men perform heavy physical tasks, while women work as clerks and teachers and in health care. [Source: everyculture.com /=/]

“Traditional roles prevail in rural areas, where men cultivate the land but the entire family is involved in planting and harvesting the crops. Women work in gardens and care for the house and children as well as barnyard animals. In urban areas, men work in construction and machine upkeep and as drivers of passenger vehicles. Women work as teachers, clerks, owners of sari-sari stores, marketers of produce and health care providers. Occupational gender lines are blurred since men also work as nurses and teachers. In the professions, gender lines are less important. Women attorneys, doctors and lawyers are found in the provinces as well as in urban areas. /=/

There are good jobs for people with skills. "We've had to raise entry-level salaries to attract people," a manger of U.S. company told the Washington Post. "In the past they genuflected and ran in the door. Now we have to compete for them." Many villagers work in Manila and send their money home.

The services sector, in which the Philippines apparently enjoys a comparative advantage, has grown steadily since 1985, when it accounted for about 40 percent of both gross domestic product (GDP) and the total number of persons employed. By 1999, services accounted for about 52 percent of GDP and about 45 percent of the total number of persons employed, and by 2004 those figures had risen to 53 percent and 48 percent, respectively. In the first half of 2005, the services sector grew more quickly (by 6.6. percent) than industry or agriculture. The fastest growing segments of the services sector were telecommunications, business outsourcing, and financial services. [Source: Library of Congress, 2006]

Alisa Krutovsky wrote in Examiner.com: Most Filipinos tend to work in accounting, as physicians or nurses, or electrical engineering. My American Filipino friend knows a lot of Filipino nurses, physicians and accountants, in her immediate and extended family. Filipino parents tend to push “math and science" majors in college. [Source:Alisa Krutovsky, Examiner.com, DC International Travel Examiner, December 27, 2009]

Teaching, small businesses, market sales, and factory work have traditionally been jobs performed by women. Most unemployed are women. Women earn 35 percent of what men earn for similar work.

There have been a number or reports of labor abuse in the Philippines. There have been reports of companies forcing their workers to take amphetamines so they stay awake and work harder. In November 2004 a strike by sugar cane workers at Hacienda Luisita in Tarlac, Luzon, Philippines turned into a massacre when strikers were 'dispersed' by the army and national police, leaving 14 dead, over 35 wounded and over 100 arrested. The plantation is owned by the Aquino family.

Youthful Filipinos Gives the Philippines an Economic Boost

Floyd Whaley wrote in the New York Times, “In the upscale business district of Manila, a midweek crowd spills out into the street. The New York-themed Borough restaurant is pulsating to the beat of a Bon Jovi song, while young, hip Filipinos take shots of tequila from a passing tray and sing in unison. “Whoa-oh, we’re halfway there!” the crowd sings. “Whoa-oh, livin’ on a prayer!” The revelers have reason to celebrate. Times are pretty good in the Philippines if you are young, skilled and live in the city. Young urban workers are helping to give the country its brightest prospects in decades, economists say.[Source: Floyd Whaley, New York Times, August 27, 2012 <<<]

“A high population growth rate, long considered a hindrance to prosperity, is now often seen as a driving force for economic growth. About 61 percent of the population in the Philippines is of working age, between 15 and 64. That figure is expected to continue increasing, which is not the case for many of its Asian neighbors, whose populations are aging. “There are a number of countries in Asia that will see their working-age populations decline in the coming years,” Mr. Neumann said. “The Philippines stands out as the youngest population. As other countries see their labor costs go up, the Philippines will remain competitive due to the sheer abundance of workers joining the labor force.” <<<

“Many of those workers are feeding the country’s robust outsourcing industry. The Philippines, where English is widely spoken, surpassed India last year as the world’s leading provider of voice-based outsourcing services like customer service call centers. Other countries in the region, most notably China and Japan, but also Thailand and Vietnam, have successfully developed export-driven manufacturing, bringing millions of people out of poverty and increasing the size of their middle classes. Manufacturing typically draws workers away from agriculture, which pays less. But many of the large foreign companies that financed such transitions to manufacturing in Asia have avoided the Philippines because of periods of political instability. The service sector — including the young call center workers who were recently reveling in Manila — are helping drive an economic boom in the cities. <<<

“But that type of outsourcing still provides only about 1 percent of jobs in the country, according to data from the Asian Development Bank. And the strong sector does not create jobs accessible to farmers or to millions of other Filipinos in rural areas who seek a way out of poverty. “While the Philippines’ business process outsourcing industry has grown impressively, it still employs a very small portion of the country’s work force,” noted Rajat M. Nag, a managing director of the Asian Development Bank. “It needs to aggressively develop its manufacturing sector to create more jobs.”

Hard-Working Filipinos

According to Thank God I'm Filipino: Filipinos over the years have proven time and time again that they are a people with an industrious attitude. Sadly, this is seen by others as Filipinos being only useful as domestic helpers, working abroad to help their families in the country. This is also present in the country’s workforce particularly the farmers. Even with little support, technological weaknesses and the country’s seasonal typhoons, the Filipino farmer still strives to earn their daily meal. [Source: Thank God I'm Filipino - TGIF, Facebook, October 8, 2010 ^^]

“Even though the government provides small support to the country’s workers, many people choose to engage in micro businesses—the so-called sari-sari stores and tiangge, the Filipino version of local markets and ukay-ukay, or second-hand stores. Some would also pursue engaging in transportation with jeepneys, tricycles and such to offer low-cost transportation to the ever mobile masses. ^^

“Though these are some examples on how Filipinos get by with everyday living, these work opportunities offer only minimum pay but Filipinos still pursue them in hopes of giving their children a decent life and proper education so they could elevate themselves to a higher standard of living.” ^^

Wages in the Philippines

According to a survey in 2006 by the Japan External Trade Organization, the Philippines’s minimum monthly wage level was about US$135, compared to $74 in India, $90 in Indonesia, $50 in Vietnam, $92 in southern China and $110 in Thailand. Monthly wages (2000): Taiwan ($1,205), Malaysia ($884), Philippines ($150), China ($65), Vietnam ($42) and Indonesia ($30). [Source: Karl John, Asia Times, January 12, 2007]

Average hourly wages in Asia (1997): 1) $0.40 in Ho Chi Minh City, Vietnam; 2) $0.90 in Shanghai, China; 3) $1.30 in Manila, the Philippines; 4) $1.80 in Jakarta, Indonesia; 5) $3.00 in Bangkok, Thailand; 6) $4.60 in Kuala Lumpur; 7) $6.20 in Seoul, South Korea; 8) $7.30 in Hong Kong; 8) $7.50 in Taipei, Taiwan. Average manufacturing wage in 1994 (dollars per day): $6.4, compared to $1.6 in China.

Minimum Wages in the Philippines

The minimum wage in the Philippines in early 2000s was around $4.50 a day. By 2014 it was about $10 a day. In January 2014, the minimum wage of workers in the private sector in Metro Manila increase of 15 Philippines pesos to 466 Philippines pesos, the Department of Labor and Employment (DOLE) said. Gmanetwork.com reported: “The minimum daily wage in the National Capital Region (NCR) for non-agricultural workers now stands at P466.00. For other private sector works, the minimum wage is at P429.00. [Source: gmanetwork.com, January 8, 2014 ^+^]

DOLE Secretary Rosalinda Baldoz said the increase is the result of the integration of half of the P30.00 cost of living allowance into the computation of basic pay. "It also means an increase in minimum wage earners' 13th month pay, overtime pay, night shift differential pay, and other statutory benefits because the integrated P15 COLA is included in the computation of these benefits," the DOLE chief said. ^+^

Baldoz said the new minimum wage rate shall apply to all minimum wage workers in the private sector in Metro Manila regardless of their position, designation, or status of employment, and how they are paid. Excluded from the new wage rate are: 1) household service or domestic helpers; 2) persons in the personal service of another, including family drivers; and 3) workers of duly registered Barangay Micro Business Enterprises with Certificates of Authority. ^+^

Wage Order NCR-No. 18—the legislation mandating the minimum wage increase—also states that workers paid by result, including those who are paid on piecework, "takay," "pakyaw," or task basis, shall be entitled to receive the prescribed minimum wage per eight hours of work per day, or a proportion thereof for working less than eight hours. ^+^

According to labor standards enforcement figures of the DOLE as of the first quarter of 2013, minimum wage compliance among unionized establishments in Metro Manila was at 95.8 percent. Some 623 unionized workplaces were surveyed. The DOLE inspected 120 NCR workplaces during the quarter and found that 105 of them had labor standards violations and only 61.7 percent complied with the minimum wage back then of P456 for non-agricultural workers and P419 for other types of workers. Nationwide, the minimum wage compliance rate upon inspection was at 81 percent, but by region, compliance varied widely from the lowest at 37.8 percent in Mimaropa (Mindoro, Marinduque and Palawan) to the highest at 94.5 percent in Region XII (SOCCSKSARGEN). ^+^

Labor Force and Employment in the Philippines

Population growth averaged 2.9 percent from 1965 to 1980 and 2.5 percent in the late 1980s. While more than 40 percent of the population was below fifteen years of age, the growth of the working-age population--those fifteen years of age and older--was even more rapid than total population growth. In the 1980s, the working-age population grew by 2.7 percent annually. In addition, the labor force participation rate--the proportion of working-age people who were in the labor force--rose approximately 5 percentage points during the 1980s, largely because of the increase in the proportion of women entering the work force. So the actual labor force grew by 750,000 people or approximately 4 percent each year during the 1980s. [Source: Library of Congress, 1991 *]

Agriculture, which had provided most employment, employed only approximately 45 percent of the work force in 1990, down from 60 percent in 1960. Manufacturing industry was not able to make up the difference. Manufacturing's share of employed people remained stable at about 12 percent in 1990. *

The service sector (commerce, finance, transportation, and a host of private and public services), perforce, became the residual employer, accounting for almost 40 percent of the work force in 1988 as contrasted with 25 percent in 1960. Much of this growth was in small-scale enterprises or self-employment activities such as hawking and vending, repair work, transportation, and personal services. Such endeavors are often referred to as the "informal sector," because of the lack of record keeping by its enterprises and a relative freedom from government regulation, monitoring, or reporting. Informal sector occupations were characterized by low productivity, modest fixed assets, long hours of work, and low wages. According to a 1988 study of urban poor in Metro Manila, Cebu, and Davao cities published in the Philippine Economic Journal, more than half of the respondents engaged in informal sector work as their primary income-generating activity. *

Unemployment and Underemployment in the Philippines

Unemployment rate: 7.4 percent (2013 est.), country comparison to the world: 81; 7 percent (2012 est.), 11 percent in 2004. Some analysts say the aforementioned figures, based on Philippines statistics, are too rosy. Some say the true figure for unemployment and underemployment is around 30 percent.

Unemployment rates among young adults are particularly high. Even when the Philippines post good growth figures it has a hard time creating enough new jobs to absorb the young adults that enter the job market every year. A large number of recent college graduates are unable to find jobs in their fields. Many of those who do get jobs get jobs as clerks or work overseas. Young people with liberal arts and education degrees have a particularly hard time finding work. Many of them end up working abroad as domestic servants. Ironically many positions for engineers and technology specialists go unfulfilled because there aren’t enough science, engineering and mathematics majors to fill them.

The unemployment situation in the Philippines is also made worse by a lack of industrialization produced by a lack of capital from Philippines banks and s lack of foreign investment. The Philippines has not entered the information technology age with the same vigor as some other Asian countries.

Reporting from the Philippine Overseas Employment Administration office in Manila, Alan Sipress wrote in the Washington Post, “By 8 a.m. every weekday, hundreds of people line up to register for jobs abroad. The government estimates that 2,500 Filipinos leave the country every day for work overseas, and about 10 million are estimated to be working abroad. There is no greater testament to the failure of Philippine democracy to provide for its people. In a country of 85 million, nearly 17 percent of all families now experience hunger, according to a recent survey by the Social Weather Station, a polling group. "It's very hard to find work here. If you stay, you feel hungry," said Ronald Almerol, 32, a machine operator who had been waiting in line for more three hours to register for work in South Korea. "In this political crisis, the politicians don't want to stop fighting each other and find time to think about what they can do for the Philippine people." [Source: Alan Sipress, Washington Post, February 25, 2006]

History of Unemployment and Underemployment in the Philippines

Unemployment, which had averaged about 4.5 percent during the 1970s, increased drastically following the economic crises of the early 1980s, peaking in early 1989 at 11.4 percent. Urban areas fared worse; unemployment in mid-1990, for example, remained above 15 percent in Metro Manila. [Source: Library of Congress *]

Beyond the unemployment generated from economic mismanagement and crises was a more long-term, structural employment problem, a consequence of the highly concentrated control of productive assets and the inadequate number of work places created by investment in the industrial economy. The size and growth of the service sector was one indicator. Underemployment was another. *

Underemployment has been predominantly a problem for poor, less educated, and older people. The unemployed have tended to be young, inexperienced entrants into the labor force, who were relatively well educated and not heads of households. In the first half of the 1980s, approximately 20 percent of male household heads and 35 percent of female household heads were unable to find more than forty days of work a quarter. *

Improved Philippine Economy Fails to Create Jobs

Christine Ong wrote in Channel News Asia, “Despite strong economic growth, unemployment in the Philippines remains the highest in Southeast Asia. The government admits it has not been able to meet its target of creating one million jobs a year, and is now hoping to create employment by drawing in more investments. [Source: Christine Ong, Channel News Asia, May 21, 2014]

“Despite the country's high economic growth, more and more Filipinos are still finding it hard to find local jobs. That is why thousands of Filipinos are lining up just to apply for jobs abroad at the Philippine Overseas Employment Administration. The Philippine economy grew at a better-than-expected 7.2 per cent in 2013, yet the unemployment rate, at 7.3 per cent, remains the highest in Southeast Asia. Kelly Bird, principal economist at the Asian Development Bank, said: “Given its young population, with some 45 per cent of the population under the age of 24, the jobs that are being created are simply not enough to absorb the large number of job seekers each year.

“A major problem facing the Philippines is a mismatch of skills. A lot of young people who enter the labour market don't have the skills that employers need -- both in terms of technical and life skills. This reflects a very weak link between education and the training sector.” Experts warn the youth employment crisis spreads beyond the borders of the Philippines. The ADB said there needs to be more focus on training across Asia. “There are a lot of reasons why we need to focus on the young, because if they are excluded from productive employment, then you create that vicious cycle of poverty and income inequality.

“It may also lead to social problems as well within the society, so it's important to assist these young people,” said Mr Bird. The Philippines is now focusing more on creating a stronger industrial base to create more jobs. Its economic blueprint calls for a shift from a consumer-led economy to an investment-intensive one. The hope is that the latest Standard and Poor's upgrade for Philippines will attract investments and will generate employment.

Unions and Organized Labor in the Philippines

From independence in 1946 until martial law was declared in 1972, the government encouraged collective bargaining and, except for setting up a commission in 1970 to supervise the fixing of minimum wages, involved itself minimally in labor relations. For most of the martial law period (1972-81), strikes were forbidden or severely limited. The Marcos labor code of 1974 made arbitration compulsory. The right to strike was partially restored in 1976, but with considerable restrictions. The Aquino government took a somewhat more liberal approach to labor, but some of the structures of the Marcos period remained. [Source: Library of Congress *]

Organized labor in the Philippines has been relatively weak. In 1986 it was estimated that about 2.2 million Filipinos were part of the union movement, accounting for approximately 20 percent of the wage-and-salary work force or 10 percent of the total labor force. These workers were organized into some 2,000 unions, half of which were not connected to a national union or federation. In 1987 only 350,000 workers were covered by collective bargaining agreements. *

The largest union body was the Trade Union Congress of the Philippines (TUCP). Formed in December 1974, it was designated the official labor center of the Philippines by the Marcos government. Another labor organization, the Kilusang Mayo Uno (KMU), or the May First Movement, was formed in July 1980, bringing together nine broadly based, more ideologically oriented unions. The two major union centers represented sharply different visions of the role of unions in society. Although TUCP supported Marcos, it represented itself as a proponent of nonpolitical unionism, concerned primarily with the collective bargaining process. The KMU was more openly political, projecting itself as a proponent of "genuine, militant, and nationalist unionism." Going beyond collective bargaining, the KMU called for the formation of worker solidarity movements and advocated a nationalist-oriented alternative to the prevailing economic and social policies of the government. The Labor Advisory and Consultative Council (LACC), formed at the onset of the Aquino administration in 1986 by then Labor Minister Agusto Sanchez, drew the various factions of the labor movement together to advise the Ministry of Labor and Employment. Membership in LACC included the KMU, the Federation of Free Workers, Lakas Ng Manggagawa Labor Center, and, for a short while, the TUCP. *

When Aquino came into office in 1986, she had the backing of a wide spectrum of the population, including those affiliated with labor unions. In her May 1 speech that year, before a large and enthusiastic gathering of labor groups, Aquino presented a package of labor-law reforms, including extension of the right to strike, making it easier to petition for a union certification election, and abrogation of repressive labor legislation decreed by the Marcos government. Soon, however, the president began to shift ground as she received vigorous protests by both Filipino and foreign businessmen against her May Day promises. The pledges were rethought, modified in some cases, and not promulgated in others. This willingness to respond to the interests of the boardroom rather than the shop floor also extended to official appointments. In particular, her first minister of labor, Agusto Sanchez, was considered to be too prolabor and eased out within a year of his appointment. *

The TUCP was generally supportive of the Aquino government, but the KMU and other progressive unions resisted the conservative drift of her administration through strikes, demonstrations, and antigovernment rallies. The KMU gained influence through its leadership of the national strike, or Welga ng Bayan, in 1987, 1989, and 1990. From September to December 1990, the KMU led a series of general strikes in response to dramatic increases in the prices of petroleum products. These labor actions were noteworthy both because of a heightened level of conflict between strikers and the authorities and because of the participation of professionals and other middle-class groups. *

Repression of labor activists, widespread during the Marcos era, resurfaced early in the Aquino administration. In November 1986, the chairman of the KMU was murdered. The following January, the army opened fire on a march of the Peasant Movement of the Philippines (Kilusang Magbubukid ng Pilipinas--KMP) and their supporters who were protesting the lack of government action on land reform. Eighteen were killed and nearly 100 wounded. In 1990 the government charged two KMU labor leaders with sedition: Medardo Roda, the head of PISTON, a federation of drivers, and Crispin Beltran, the chairman of KMU. Old charges of slander and fraud dating back to 1967 and 1971 were revived against Beltran. The government also imprisoned the leader of the KMP, Jaime Tadeo, on ten-year-old fraud charges initiated against him by the Marcos government. After a 1990 violent strike, during which an estimated 500 participants were arrested, both the military and government officials suggested banning the KMU as a communist-front organization. *

Jobs for Poor Street Children

Poor people in the cities of the Philippines peddle cigarettes in the streets and do odd jobs. Poor street children often dodge moving traffic on busy Manila streets as they beg for small change from motorists or wash windshields at major intersections. In Manila, 10-year-old jump boys hang out at intersections in Manila selling cigarettes. They often smoke the brands they sell.

In the Philippines, an 220,000 children live on the streets of its major cities. Many spend their day begging for money to buy food and become the breadwinners for their families. According to UNICEF: “Mary, 12, lives and works with her family on the streets of Manila. She helps her mother sell cigarettes outside Starbucks in Binondo (Chinatown) and looks after her younger brothers and sisters. She has been out of school for two years and is under pressure from her peers to sniff solvents. “I don’t want to sleep on the streets anymore,” she says. [Source: UNICEF]

Lucille Talusan and Charlene Israel of Cbnnews.com wrote: “It may seem like a breath-taking stunt for most of us, but for three-year-old Elsha May, it is her craft: begging for food. Maritess, her older sister, says that Elsha May was barely two when she started begging money from Jeepney passengers. The Jeepney is a local means of transportation in the Philippines. As soon as the stoplight turns red, Elsha may runs to the Jeepney, wipes the shoes of the passengers, and looks into their eyes until she gets the equivalent of two cents. At night, Elsha May is at the train station, begging once more for money and food. When the train station closes at 10 in the evening, her oldest sister, Maricris, picks her up and brings her home. Elsha May gives all her earnings to her family. After a hard day's work, she shares with her siblings a plate of noodles that she bought with her earnings.[Source: Lucille Talusan and Charlene Israel, Cbnnews.com, November 17, 2006 |+|]

“Maricris is 14 years old and has stopped going to school. She only finished first grade. "I had to stop because we had no money to put me to school," Maricris said. "I have to take care of my younger brothers and sisters who are out in the streets. We need to beg so we can have money to buy rice." Maricris' father, Vicente, says he is aware of the dangers that his children are exposed to on the streets. But Vicente also says he has not found a job yet, and so this is the only way his children will not go hungry. |+|

“On another visit that the CBN News team made to the train station, we saw Elsha May fast asleep. But even as she dozed, she earned the much needed cents for her family. People walking by the sleeping child dropped money into her awaiting cup. We were surprised to see that five of her seven siblings were there too, begging. Maricris said that their oldest brother could not join them because he was arrested for sniffing glue the night before. She said she is afraid that the social welfare will pick them up and bring them to the shelter for street kids.” |+|

Reasons Filipino Kids Are On the Steets

“Children end up on the streets for a variety of reasons,” Jesus Far, Child Protection Officer at UNICEF Philippines comments. “Sometimes it’s because they’re being abused at home, either physically or sexually, sometimes it’s because their parents are unable to provide for them and they need to work to survive and sometimes it’s because of peer pressure. Boys in particular are attracted to the street gangs. They get involved in sniffing solvents, drinking alcohol and taking illegal drugs. They are also drawn to crime, violence and sexual abuse. Often, they end up injured, jailed or killed.” [Source: UNICEF <<<]

Butch, 47, is a street educator with Childhope Asia Philippines and a former street child. He never knew his parents and ran away from home after his grandmother died. He ended up on the streets, where he led a gang, sold drugs and acted as a pimp for other boys. He also got into trouble with the law and spent time in detention. By the time he was 17, he realised his life had to change. “We were a group of eight kids and I was the leader,” Butch says. “I was street smart and didn’t trust anyone. But these people, the social workers, they were persistent and really got to know the group. So I said ‘I’m going to try this. Why not? I have nothing to lose’. By this time, I thought that I really need to change my lifestyle.” <<<

Street children are regularly denied the right to education, health care and protection. They are often exploited and abused.“There is a lot of abuse on the streets,” Butch says. “In my area there are a lot of market vendors who think that street children are the dregs of society. So they don’t think these kids have rights. Every day, the kids get sick from pneumonia, skin disease and tuberculosis. Even day-to-day life is stressful for them. They are hungry and have to look for food all the time. They don’t have good friends and there are lots of vices around them.” <<<

Child Labor in the Philippines

Child labor is another big social problem in the Philippines. By one estimate there are 3.6 million child workers in the Philippines between the ages of 5 and 17. They work in mines and in factories and roam the streets hawking all kinds of things. By one estimates in the early 2000s about 60 percent of them work in hazardous conditions. About 100,000 children work as prostitutes.

Some of the children are recruited by agents who pay parents money for the services of the children in an arrangement that has a lot in common with slavery. One UNICEF representative told Reuters, "It's the new slave trade. Many children and parent engage in it willingly. According to a government report, “Some parents and the community view children like them as models to be emulated. Thus, child labor is not a problem but a way of life.” The children “find their work difficult, but stay working because they want to finish schooling. The responsibility to look after themselves and other family members has become their own.”

The mining industry relies on children to much its most dangerous work. In the gold mining areas in of Camarines Norte Province, children as young as 7 plant sticks of dynamite used to blast tunnels to search for gold veins. One young worker told Reuters, “It was frightening, but I had to learn to do it. “ Even more dangerous is collecting gold dust. Children doing this suffer from mercury poisoning and lung disease and die in cave ins for a pinch of gold dust, earning about $2.50 a day in the early 2000s.

See Child Prostitution Under Sex

Child Labor on Sugar Cane Plantations in the Philippines

There are also many children working in the agricultural sector. J. de Boer wrote in Terre des Hommes: “The situation on the sugarcane plantations is illustrative of the hazardous forms of child labour, which are often overlooked by policy makers and researchers. Plantation work also illustrates the grey area between children’s work, child labour and the worst forms of child labour – distinctions that influence the protection offered to children. The work that children in this case study perform on the sugarcane plantations is exemplary of this grey area between common child labour and its worst forms. [Source: J. de Boer, Terre des Hommes, Netherlands, 2005]

The report found: 1) children are exposed to a number of hazards at work including heat, heavy work, long hours, wounds and risk of pesticide poisoning; 2) almost all parents interviewed would rather their children did not work, although the expectation for them to do so remains; 3) child labour in agriculture is poorly regulated and difficult to monitor; and 4) the underlying cause of the problem is poverty

The author proposes a number of ways forward: 1) the new child labour law needs to be better enforced, with more inspections in the field and greater accountability for violators; 2) provision needs to be made so that parents are able to pay for basic needs and education costs, without requiring their children to enter the workforce - once these needs are met, children should be removed from the sugar production process; 3) active participation of parents and children in the push for reform is an effective strategy for change; and 4) the hazardous effects of plantation work, particularly need to be addressed.

Workers for Foreign Companies in the Philippines

Most of the factory workers at foreign-owned factories in the Philippines are women. The mostly females employees at a factory in Rosario that made Jordache jeans in the 1990s earned $6.30 a day plus bonuses if they produced more than their quota. One women make around $500 a month her their bonuses are added in.

The women lived in dormitories, wore comfortable clothes and surgical masks (for protection from dust and textile particles) at work and enjoy benefits such as pensions and health care. The factory was well lit; workers could buy snacks at a canteen during their breaks; and management organized parties and outings for them.

Workers at the Acer factory at Subic Bay earn 80 cents an hour in the early 2000s producing 150,000 computer mother boards a month. Many of the 710 employees at the factory worked 72 hours a week. Acer has also made notebook computers, CD-ROM drives and desktop computers at Subic Bay. Female workers in the Philippines at foreign factories have pooled their money together to buy pay for improved housing for their families.

Outsourcing in the Philippines

The Philippines is becoming a "back office" for companies in United States and Britain. Foreign companies—particularly those involved in outsourcing—have been drawn to the Philippines by the English-speaking work force. Among the foreign companies that have used Filipino workers are American Online, Trend Micro, Caltex and Accenture (formally Andersen Consulting). On a trip to the United States, Philippine President Arroyo lobbied American companies to send their outsourcing work to the Philippines rather than India, Russia or Ireland.

In 2011, the Philippines surpassed India as the world’s leading provider of voice-based outsourcing services. In 2012, Floyd Whaley wrote in the New York Times, Filipino “workers are feeding the country’s robust outsourcing industry. The Philippines, where English is widely spoken, surpassed India last year as the world’s leading provider of voice-based outsourcing services like customer service call centers. According to the country’s Board of Investments, offshore call centers employed 683,000 Filipinos in 2011 and generated about $11 billion in revenue, a 24 percent increase from the previous year. The government is seeking to expand the industry and has said it hopes it will generate $25 billion in revenue by 2016. [Source: Floyd Whaley, New York Times, August 27, 2012 *=*]

“India, China, Russia and the Philippines are expected to be the major sources of outsourcing in the future. An industry that is expected to grow to $136 billion by 2015, from $4 billion in 2000, and generate 3.3 million jobs for American companies alone for American companies alone. On Emerald Avenue in the Ortigas business district of Manila, where hundreds of call center workers pour out of skyscrapers to gossip and smoke, Mika Santos, 18, does not have much to say about the national economy. But she is very happy with her own situation. *=*

After completing a two-year information technology course and passing an exam in English proficiency, she started handling customer service calls for a United States mobile phone company. She earns a comparatively high salary for an entry-level job, and her employer offers incentive bonuses, free meals and shuttle service. Had she been born a generation earlier, she would most likely have worked as a low-income farmer or gone overseas to find work. “My parents didn’t have any opportunity like this,” she said. *=*

History of Outsourcing in the Philippines

Rather than getting into software development, where India was king and the Philippines had difficulty competing, the Philippines has chosen to exploit its people’s English language skills and go after “business process outsourcing,” which includes things like medical transcription, accounting, tax preparation and customer-service call communications. One survey found that Americans had an easier time understanding Filipino English speakers than English speakers from India or Ireland.

One of the first outsourcing successes in the Philippines was Asia Prepress Technology in Subic Bay. There, workers earned 90 cents an hour in the early typing in text for journals and technical texts that are printed in the United States. Workers were busy at keyboards 24 hours a day, 365 days a year. A similar company, Creative Transcribing Technology, was launched at Clark air base by a former Communist insurgent.

America Online uses call centers in the Philippines to provide customer service. Medi-Type Transcriptions allows doctors in the United States to dictate medical information by phone to clerical workers in the Philippines who transcribes the information, which is double checked by Philippine doctors and then sent electronically back to the United States. Accenture had 450 employees in the Philippines in 2000. They were involved in developing software and running 24-hour customer support.

Medical Outsourcing for the U.S. in the Philippines

Low-paid transcriptionists in the Philippines are helping to keep the huge U.S. healthcare bureaucracy running. Paul Watson wrote in the Los Angeles Times, “It started out as just another Thanksgiving Day stomachache, a nagging pain that sharpened until it reverberated from California halfway around the world. When the ache in her lower right abdomen became excruciating, the twentysomething woman was rushed to a surgery center, where the doctor diagnosed a ruptured appendix. The woman needed an operation -- fast. But before the surgeon could wheel her into the operating theater, he had to find out whether the patient's insurance company would pay. That meant paperwork: An examination report had to be dictated, typed up and submitted to her insurer for approval. [Source: Paul Watson, Los Angeles Times, April 19, 2009 ==]

“So while the woman waited in agony, her doctor dialed an 800 number. An electronically perky voice invited the surgeon to press 2 if he was ready to start. The instant he hung up a few minutes later, a digitized recording raced through fiber-optic cables on the Pacific Ocean seabed and into a computer server on the 17th floor of a Manila office tower, where medical school graduate Dinah Barrete was working the graveyard shift. Ear-bud headphones plugged in, she tapped a pedal to start the doctor's voice file and began typing. Her transcription of his report was on its way to him via the Internet in 15 minutes, as quickly as though the work had been done just down the hall, but much cheaper. ==

“So goes the global traffic in Americans' intimate health information. In a startling illustration of the life-or-death decisions involving low-paid workers thousands of miles away in today's globalized world, Americans' most personal details move 24 hours a day as U.S. healthcare providers outsource billions of lines of transcription work each year to offices across Asia in a bid to cut the massive cost of medical bureaucracy. "It's a cyberspace miracle every time it's done," said Fred J. Kumetz, a Beverly Hills lawyer who founded and runs EData Services, one of the biggest companies transcribing U.S. medical records in the Philippines. From dictated summaries of routine checkups to complete recordings of conversations between surgeons and nurses in operating theaters, the foreign workers are transforming the digital audio files into the documents that tell Americans' medical histories.”

Most of the work is done for 10 to 15 cents a line in less than 24 hours. But the cost can be 300 times that for "stat," or immediate, orders, such as when a doctor needs a transcript of an emergency medical team's radio report before its helicopter lands with a patient. Regardless of the price, the process is largely the same. Audio files dispatched across the Internet are transcribed and the text is fired back to the U.S. to meet government demands for a shift to electronic medical records.

Before broadband connections made it easy to outsource office work in the 1990s, Americans typed out medical records and the cost of healthcare bureaucracy steadily ballooned. Now thousands of low-paid workers in countries such as India, the Philippines and Pakistan work in offices that never close, churning out massive amounts of U.S. medical records. Tapping feverishly at keyboards in front of row upon row of computer screens, Asian transcriptionists often strain to understand what American doctors have dictated through phone lines or into digital recorders.

The Philippines hopes to reap big profits from his multibillion-dollar push to computerize health records. The business of transcribing American medical files employed 34,000 Filipinos and generated $476 million in revenue last year, said Ernesto Herrera, a former senator who heads the Trade Union Congress of the Philippines. He expects the number of transcriptionists to more than triple, and annual billings to jump to more than $1.7 billion, by the end of next year.

"Outsourcing is unavoidable, because the cost in the U.S. is just too high," Herrera said. Filipinos can beat Indians in the race for medical transcription work from the U.S. because, as a former American colony, the Philippines is more familiar with American accents, Herrera said. This country also has a vast pool of jobless medical workers who need little additional training to take dictation from American doctors, he said. "Right now, we have about 400,000 licensed nurses who are unemployed in the Philippines," Herrera said.

One Philippines Medical Outsourcing Office

Paul Watson wrote in the Los Angeles Times, “EData's Manila office never closes, and the video camera watching over scores of Filipinos working at computer terminals 24/7 never blinks. It's connected to the Internet so American clients can peep in on the operation whenever they want. High on one wall, a row of clocks tick off the time in Los Angeles, New York and Denver, as young doctors sit at double-screen computer terminals reviewing Americans' medical insurance claims, performing one of EData's other specialties. [Source: Paul Watson, Los Angeles Times, April 19, 2009 ==]

“But most of the workers in the long office are typing records from recorded dictation or conversations that constantly stream into the company's computer server. As they listen, transcriptionists pick up hints of how swamped some American doctors are by medical bureaucracy, which follows them everywhere. "We've had a doctor dictate in a zoo," said Barrete, a transcriptionist and executive vice president with EData. "We could hear the elephant, so where else could she be?" ==

“Transcript editors are usually doctors, who sometimes pick up errors in American physicians' dictation, even what they suspect are misdiagnoses, as they check for typos. Unless clients give permission to correct the mistakes, they stay in the text, usually in italics, to make sure the transcript is verbatim, said Danilo Navarro, executive vice president of Xynet Communication Solutions Inc., which transcribes about 4 million lines of American medical files a month. The same goes for any cursing, jokes, fishing stories, flirting or the odd "Oops!" that transcriptionists hear in recordings of operating theater chatter, he said. ==

“Outsourcing isn't expected to harm job prospects for American transcriptionists, because there is so much work to be done, said a report by the U.S. Bureau of Labor Statistics. About 101,000 Americans were employed as medical transcriptionists in 2002, according to the bureau. Most were women, many of them working from home. By 2006, the number had dropped to 98,000 as high-speed Internet connections allowed companies to outsource more of the work. But the bureau estimates that the number of American medical transcriptionists will grow 14 percent by 2016, faster than the average for other jobs.

“The median income for American transcriptionists is $31,250 a year. In the Philippines, a fast one paid by the line can earn about $6,000 annually, or three times a nurse's salary, Herrera said. The profession's stars earn as much as 300 times the regular rate doing the less frequent, but high-pressure, job of transcribing radio traffic between medevac helicopters and hospitals, Navarro said.Even if new technology automates more transcription, Navarro said, there is a backlog of about 40 years of American medical files waiting to be typed into computer files, work that could keep legions of foreign workers at keyboards for years. =

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Philippines Department of Tourism, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

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© 2008 Jeffrey Hays

Last updated June 2015

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