UNDEREMPLOYMENT AS CAUSE OF POVERTY

UNDEREMPLOYMENT AS CAUSE OF POVERTY

Why do so many Filipinos perceive themselves as poor? According to the latest Social Weather Stations (SWS) survey, 63% of Filipinos identify as poor—a striking statistic that raises questions about the roots of poverty and the economic realities faced by many.

Perception or Reality?

Is this perception grounded in fact? It likely is, given that many Filipinos struggle to make ends meet despite working hard. The crux of the issue lies in income levels. Many workers earn far less than they need to support themselves and their families adequately. Could underemployment be the missing piece of this puzzle?

Defining Underemployment

Underemployment refers to situations where individuals are working, but their jobs either fail to match their skill levels or do not provide enough working hours to meet their financial needs. This can manifest in various ways:

  • Time-Related Underemployment: A part-time worker desiring full-time hours.
  • Skill-Related Underemployment: A nurse working as a telephone operator or a teacher employed as a salesgirl.

These scenarios reflect an inefficient labor market where workers’ potential is underutilized, leading to suppressed income levels and diminished career satisfaction.

The Role of Underemployment in Poverty

The link between underemployment and poverty is evident. When individuals are stuck in jobs that pay less than their qualifications warrant or offer fewer hours than needed, they cannot generate sufficient income. For instance, many minimum wage earners still find themselves below the poverty line, particularly when working multiple jobs just to stay afloat. This situation is compounded by rising costs of living, making it increasingly difficult for families to achieve financial stability.

The Mismatch Problem

A significant factor contributing to underemployment is the skills mismatch in the labor market. Many graduates enter fields with limited demand for their qualifications, forcing them to take jobs unrelated to their training. This mismatch highlights systemic issues in education and workforce planning, where curricula and career pathways do not align with market needs.

Minimum Wage and Poverty

The minimum wage is meant to provide a safety net, ensuring that workers earn enough to live above the poverty line. Yet, many minimum-wage earners still struggle to make ends meet, raising the question: Is the minimum wage truly effective? If working two or three jobs at minimum wage cannot lift families out of poverty, then the system needs reevaluation.

Correlation Between Unemployment and Poverty

Unemployment and poverty are closely linked. When people lack jobs, they lack income, pushing them into poverty. Conversely, poverty can limit access to education, healthcare, and other resources necessary for securing stable employment, creating a vicious cycle. Underemployment adds another layer to this challenge—it allows for some income but often not enough, perpetuating financial instability.

Breaking the Cycle

To address underemployment and its contribution to poverty, a multi-pronged approach is needed:

1.   Enhance Job Matching: Strengthen career counseling and job placement services to align workers’ skills with market demands.

2.   Improve Education and Training: Reform educational systems to focus on in-demand skills and provide vocational training for high-growth industries.

3.   Invest in Job Creation: Develop policies that encourage industries to create high-quality, full-time jobs with fair wages.

4.   Reassess Minimum Wage Policies: Regularly update minimum wage levels to reflect inflation and the cost of living.

5.   Support Small Businesses: Promote entrepreneurship and support micro, small, and medium enterprises (MSMEs), which can create diverse employment opportunities.

Moving Forward

Underemployment is not just an economic issue—it is a social one, affecting millions of Filipinos who work tirelessly but remain trapped in poverty. By addressing underemployment, we take a crucial step toward creating a more equitable and prosperous society.

The question remains: How can the government, private sector, and civil society work together to ensure that every Filipino has access to meaningful, well-compensated work? Finding the answer could transform perceptions of poverty into realities of progress.

Ramon Ike V. Seneres, www.facebook.com/ike.seneres
iseneres@yahoo.com, 09088877282, senseneres.blogspot.com

02-04-2025

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