17.7%

In January 2020, unemployment stood at 5.3 percent. That translates into 2.4 million people in search of jobs. That unemployment rate was just slightly above the 5.1 percent recorded April last year.

It took many years of tough reforms and intense policy battles to get to that low unemployment rate. The low rate is key to bringing down the incidence of poverty.

At the start of the Duterte administration, poverty incidence stood at a little over 23 percent. The administration promised to bring that down to 14 percent before the end of its term. That sounded ambitious.

By the end of last year, the poverty rate did climb down to 16 percent on the back of rapid economic expansion. It seemed the administration was going to meet its own ambitious target ahead of schedule. Our economic managers set a “fighting target” of up to 7.5 percent GDP growth.

But the pandemic intervened.

Mid-March, the entire island of Luzon was put on “community quarantine” in a frantic effort to stop infections from running rampant. That measure basically shut down much of the economy, immediately rendering millions unemployed.

Yesterday, the Philippine Statistics Authority (PSA) announced an unemployment rate of 17.7 percent. This is more than triple the unemployment rate recorded for January. We now have the highest unemployment on record. Conditions changed dramatically after the lockdown.

This percentage translates into 7.3 million Filipinos now jobless. This is not just a number. This is 7.3 Filipinos and their dependents wondering where their next meal will come from.

If it is any consolation, our unemployment rate is lower than what the US is dealing with, where about a quarter of the workforce is idle. Over the last 11 weeks, 42 million Americans filed for unemployment benefits. This is worse than the conditions characterizing the Great Depression of the 1930s.

But we do not have the system of unemployment benefits Americans enjoy. Instead, we rely on the informal sector when we are hit by surges in unemployment. This is our safety net.

Surely, the surge in unemployment will translate into a sharp drop in domestic demand. This will, in turn, reflect in lower nutritional intake and all its long-term consequences. Expect our self-reported involuntary hunger figures to spike as well.

Our economic managers are anticipating a strong rebound by the third quarter of this year. High unemployment rates for a protracted period could make the problem chronic.

We know domestic unemployment will be exacerbated over the next few weeks by the return of our migrant labor. The running estimate is that poor economic conditions in our traditional labor markets pushed 300,000 migrant Filipino workers from their jobs. So far, the bulk of them are choosing to remain abroad to await new opportunities when an economic upturn happens.

Over the last two decades, our economy struggled to create a million new jobs a year. We never really recovered from the unemployment shock that happened when militant unionism forced our labor-intensive industries (such as those in garments) to relocate abroad.

Whatever recovery plan is being drawn up should look into quickly opening up labor-intensive economic activities especially in the rural areas. This might involve relaxing our strict labor standards that only served to inhibit hiring. It should certainly involve liberalizing agro-industry.

We have to rebuild our economy from the bottom up. We should think of multiplying economic opportunities at the grassroots in place of the traditional capital-intensive job creation.

Smoldering

The first few nights of massive protests also saw massive rioting across the US. It was as if the nation’s cities were smoldering in the midst of a pandemic.

This is America in the age of Donald Trump, a divisive leader who actually and repeatedly urged tougher police methods on what he calls “thugs.” In the midst of a health crisis, a profound economic crisis and yet deepening racial disparities, the country finds itself leaderless.

The protests, sparked by yet another instance of police brutality layered with obvious racism, reflect many tensions building up in American society. Racial injustice remained unresolved. Today, a pandemic running rampant produced economic dislocation that can only magnify the inequalities persisting.

It is beyond Trump to calm the troubled waters. He does not have the insight, the attitude and the intellectual discipline to effectively lead a troubled nation. Worse, his narcissism, racism and pettiness have proved to be unnecessary provocations during this troubled time.

Already a perverse and bizarre personality in normal times, Trump tends to panic in the face of crisis. He stumbles into a maze of misjudgments, escalates his insensitive rhetoric and aggravates everything.

This week, he threatened to send the military into the protesting cities, precipitating a very public disagreement with his own Defense Secretary. Last Monday, he had a peacefully protesting crowd in front of the White House forcefully cleared just so he could walk across the street for a photo opportunity, holding a Bible as a prop and a historic church as a backdrop. The tasteless stunt was universally condemned by church people and by all of America’s living former presidents.

Fortunately, after 10 days of protests, America’s better side begins to predominate. The protests themselves have become focal points for demonstrating the harmony of Americans regardless of race, religion and age. Real reforms are being discussed to cure the sadistic culture of America’s police force.

Much admired retired general James Mattis, a professional not known for speaking up on political issues, said it best: what is happening is the outcome of three years without mature leadership. He called on Americans to unite without Trump.