Employers have observed that the high unemployment rate in the country is due principally to the restrictive, punitive and uncompetitive labor laws that discourage investment. Another is the mismatch of jobs to the skills requirements of industries.
For many years, employers have provided on-the-job training under the apprenticeship law until 1986 when the government issued an Executive Order limiting the period to six months, effectively emasculating the law.
Contributing to the jobs-skills mismatch is the low level of basic education of majority of our workforce and the predominance of micro and small enterprises which provide inadequate job training programs.
Micro and small firms are vulnerable to labor market imperfections because of financing difficulties, weak or absence of human resource management and lack of appreciation in the value of workforce training.
This calls for public intervention to widen the extent and quality of training, specifically for micro and small enterprises.
Improving education is the most important form of intervention. Additionally, apprenticeship and dual training will have to be vigorously promoted to achieve a higher success rate for skills training similar to the German experience.
The Philippines is a labor-surplus job market. Thus, employers are more strict in hiring.
Despite such employment difficulties, we continue to produce annually an average of about 600,000 college graduates, but only 75 percent are hired within a year after graduation. Add to this are other new entrants to the labor force, the unschooled youth.
Given this situation, there is an urgent need to consider current and prospective labor market requirements in curriculum development and overall educational planning to promote greater employability of graduates. Furthermore, there is a need to pursue the development of industry-education linkages, more effective training delivery systems, a centralized and autonomous system of skill standardization and certification and close coordination with various industry boards and professional associations.
Schools and the employment market can be linked through referral centers and through a system of regular consultations between training institutions and industry.
Basically, our educational system consists of a three-layered structure, each layer represented by an institution with separate functions and objectives. At the apex of this structure is the Commission on Higher Education or CHEd which exercises oversight over tertiary education up to post-graduate courses. The base of this structure implements elementary and secondary education. Both the apex and base are concerned with formal education.
The middle layer is the Technical and Skills Development Authority or TESDA which is tasked with skills development of middle level manpower.
TESDA has a multi-sectoral and tripartite governing board which is vested by law with the responsibility of planning, setting standards and allocating government resources for implementing technical, vocational and skills development programs. It also administers the national apprenticeship program and the dual training system that borrowed heavily from the famous German dual-tech program.
Training by private employers, especially in small firms, is restricted to informal on-the-job training. This is the case of traditional apprenticeships which provide most of the skills workers use particularly in small unregulated firms in the informal economy. It is in this area where TESDA, in close collaboration with such firms, can play an active role in skills development that meets the needs of industry.
To reiterate, the two reasons for our problematic unemployment situation are, first and foremost, our restrictive and antiquated labor laws and second, job-skills mismatch. The latter is being addressed by public private partnership but hampered by our archaic labor laws which Congress needs to amend. Moreover, organized labor should cast aside its unfounded fear of losing membership from extended training program.
Hopefully, when all stakeholders get their act together, employment for the masses could be realized in our lifetime.