Wednesday, May 10, 2006

Skills-jobs mismatch

WE have been talking about “jobless growth,” about how the economy has been growing decently at 5 percent or higher in the last few years and yet the country couldn’t seem to lick joblessness.

Each analyst has his or her explanation: high population growth, the concentration of new jobs in the services sector requiring stringent qualifications, the capital intensity of investments owing to a fiscal incentive regime that cheapens capital vis-à-vis labor, the economy’s inability to grow enough to produce more jobs, etcetera. All these explanations make sense and for decades, the practitioners of the dismal science (the economists) have been pontificating about them in their “empirical studies.” The recent job fairs in Davao, however, seem to indicate that the real reason might be job mismatch. The country’s college and universities are not producing graduates that the industries and institutions needed.

Consider this: In the April 28-May 1 jobs fair in Davao City, companies offered 10,000 jobs, yet the DOLE got only 5,000 applications. Out of 10,000 jobs offered, 7000 were overseas jobs and the rest local jobs. Yet only 1,800 applied for those jobs abroad. We thought all along the problem was lack of jobs!

The Davao job fair results very possibly mirror the national situation. From the 2006 to 2010, for instance, the Commission for Information and Communications Technology (CICT) projects that the country’s “cyberservices” industry—comprising call centers, medical and legal transcription, software development, engineering design, animation, and back-office operations—projects a labor supply shortfall of 273,000 unless the government and the private sector can do something drastic to address it soon. In a country perennially suffering from severe joblessness, this labor supply shortfall is almost criminal.

It’s so easy to blame the parents or the schools for this problem. It’s so easy to figure out how parents are not providing enough guidance to their children as to what sort of career would ensure a better life for them. It would be so convenient to blame schools, nay diploma mills, for mass-producing poorly trained hordes of quasi-educated graduates like the Model T Ford. After all there are too many of these schools around, offering accountancy degrees for graduates that couldn’t pass the board exams, engineering graduates who don’t know engineering, and lawyers who can’t write decent pleadings. Certainly, these schools should shape up and fast. We think, however, that this issue is just one side of the coin.

The other side lies in the failure of the government, specifically the Department of Labor and Employment, to provide adequate job market information by which parents and their children make career decisions. Certainly, greed among diploma mills and the overpriced schools are a scourge but if school administrators have adequate labor market information to guide their course offering and school curricula, the problem of job mismatch would be solved. Besides, students who are well aware of the job market are going to enroll in courses that would land them the hot jobs that they desire, thereby forcing the schools to offer the right mix of disciplines. In sum, the interaction of supply and demand for labor is not functioning well in the country for lack of job market information.

And whose job is it to provide this information? The mass media comprising print, broadcast and online, should help and indeed it’s playing this function well through the regular classifieds sections. In the Philippine context, however, the reach of mass media is still limited, especially for print and online media. Broadcast may have the potential to reach a wider audience but these institutions whose revenues are determined by advertising hours are not likely to offer systematic and processed information about the job market. Only the government, therefore, given its powers and resources, should be able to provide this information and yet it’s not doing it systematically. But how could the government perform this function?

There are many ways, besides the usual job fairs, skills development, training, and upgrading of the educational system. In the United States, for instance, the Department of Labor provides an “Occupational Outlook Handbook” that provides details of jobs available in the US and their prospects. Specifically, the handbook describes the nature of work; working conditions; training, other qualifications, and advancement, job outlook, earnings, related occupations, and sources of additional information. This handbook is widely available to all Americans, and is regularly updated such that Americans can derive inputs in making career decisions as times and trends change. Certainly, the Philippines, which sets great store on its people as a major economic resource making up for lean capital, should have something like this. The better the DOLE considers doing this, the better.

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