INFLATION, LABOR

AND UNEMPLOYMENT
 LABOR AND LABOR PROBLEMS

Unemployment and underemployment weigh

down the Philippine economy. Lockouts and
strikes normally happen whenever there are
issues on employees salary rates, benefits,
unjust termination, and many others.
 The labor situation in the country should be
examined as one of basic economic resources.
Labor is not only concerned with the term full
employment but also with other factors like
income, wage, and productivity. Likewise, it is
inherent for labor to face problems because it is,
after all, about people and what concerns them.
 LABOR FORCE

This refers to the available human resources,

whether employed or unemployed, including
those who are at least 15 years old.
If an individual is a highschool graduate, he/she is
already part of the labor force.
 UNEMPLOYMENT

Unemployed
individuals are those part of the
labor force who are willing to engage in
productive activities yet currently unable to do so
(at least for the past four weeks).
Formula:
unemployment rate
TYPES OF UNEMPLOYMENT
 FRICTIONAL UNEMPLOYMENT

Refers to situations in which people who are in

between jobs or who are currently applying for a
job are waiting for would be employers to hire
them.
An example is a person who resigns from his/her
present job to transfer to another or a first-time
applicant waiting to land a job or for an employer
to hire him/her.
 CYCLICAL UNEMPLOYMENT

It is experienced if the economy slows down due

to less economic activities.
An example is the period after Christmas when
people who were employed to work in malls
during the holiday season lose their job.
 STRUCTURAL UNEMPLOYMENT

It happens to those who are out of work for a long

period because of various reasons like work
displacement.
For instance, a worker gets terminated from work
and is not able to get another job immediately.
 SEASONAL UNEMPLOYMENT

Characterized by being out of work because of

the changing season., eg., from rainy season to
dry season.
For instance are farmers who have few productive
things to do during the flash flood season or
workers in popular vacations spots during off-
seasons.
 UNDEREMPLOYMENT

Underemployment is a form of a labor problem in

which a worker is employed in a job that does not
fully utilize his/her skills and training.
Ex: Medical doctor working as a sales
representative.
Clearly, his/her functions require minimal and
mundane ability way below the skills and
expertise he/she gets from his/her education and
training.
 WHY IT MATTERS?

Underemployment may be most affected by the

number of youthful workers in the labor force,
who tend to experience more underemployment
as they change jobs and move in and out of the
labor force, and public policies that may
discourage employment or the creation of jobs
(such as a highminimum wage,
highunemploymentbenefits, and low opportunity
costs associated with laying off workers).
 Employment is the primary source ofpersonal income
and thus a source of economic growth. This is primarily
why underemployment, which is alagging indicator, can
provide considerable information about the state of
theeconomyand about particular sectors of
thateconomy. For example, high underemployment is
generally indicates an economy is underperforming or
has a falling gross domestic product, suggesting weak
labor demand, unproductive labor policies, or
mismatches between the demands of workers and
employers. Low or falling underemployment may signal
increases in the supply of whatever the new jobs
produce, which suggests an expanding economy.
2 TYPES OF UNDEREMPLOYMENT

Visible underemployment occurs

when an employee works less
than 40 hours a week and is
willing to work longer hours.
Ex: a part-time crew member of a
fast food chain works two hours a
day as a replacement.
 Invisible underemployment refers to
situations in which employee works
more than 40 hours a week and is
still working longer hours.
Ex: Street sweeper who receives a wage
of P25/hour and works 10hrs/day