Behavior

Behavior of the Informal Settlers

by Paul J. Dejillas

ILO Consultamt

                Let us shift from the macro to the micro level to see how informal-sector workers behave and relate to factors influencing them. The study of Marikina and Davao is chosen since it is most recent and is able to differentiate behavior in terms of employment category, gender, area, age, education, and even marital status. The study focuses on the effects of globalization on the Philippine informal sector.

The results indicate that changes over time do not only exist, but that the nature, extent, and direction of these changes show concrete variations and differences with respect to gender, area and employment category. The findings also reveal that variations and differences with respect to gender, area and employment category are evident even if viewed within a given period of time, say 1999. Differences can thus be discerned on the conditions of men and women, of the urban and rural areas, as well as of the different job categories of informal workers in the export-oriented industry.

                For brevity reasons, let me focus only on the effects of the external factor on employment conditions.

The impact of the 1998 crisis on the jobs of workers in the informal sector can be described as “quite substantial” (Table 4-17). On the whole, 13.6 percent of the total respondents, 14 respondents out of 100, lost their jobs as a result of the crisis. “Loss of job” means either termination of employment on the part of paid employees or inability to get job contracts on the part of the homeworkers. It also means closure of the business enterprise---either temporary or permanent---on the part of small household operators, namely, the self-employed or own-account workers and the employers.

Table 4-17.  Impact of the crisis on employment by sex and area

We have found out in the focus group discussions that the impact of the crisis has been quite sudden and devastating to some. The experience was economically pressing, since it means loss of income or profit to the individual and the family. It is especially financially straining to those who have not yet been able to recover and find employment until the time of the interview. Women are more affected by the crisis, judging by the proportion of those who lost their work.  The proportion of women respondents who lost their jobs following the crisis is higher (14.5 percent) than that of the men (12.7 percent).

This finding verifies and reinforces the observation expressed in many studies that it is the women that bear the brunt of the recent financial crisis (T. Corpus, 1998; M. Carr, 1998). Corpus strongly maintains that women are “the main casualties of the growing unemployment, underemployment, physical dislocation resulting from the crisis.” Carr believes this to be so because the industries that mostly employ women are the ones most affected by the crisis.

                Between the urban and rural area, it is the former that absorbs the negative impact of the crisis most. The proportion of urban workers who lost their jobs is much higher (20.0 percent) than that of the rural workers (6.8 percent). Urban women workers are more affected (20.0 percent) than their rural counterparts (6.1 percent). Likewise, it is the urban men who get the highest proportion who lost their job as an after-effect of the crisis (20.0 percent). All this indicates that the negative impact of the crisis insofar as employment is concerned is less felt in the rural area.

It is also possible to view the employment effects of the crisis by educational attainment, age and marital status of the respondents. The majority of those who lost their employment as a result of the crisis (67.7 percent) possess high-school education (Table 4-18). The proportion of women with high-school education and who lost their jobs is higher (75.0 percent) than that of men (60.0 percent). In the college level, however, the proportion of women is much lower (12.5 percent) than that of men (20.0 percent).

The finding that women are the most adversely hit by the crisis remains (Table 4-17) in spite of the fact that the women respondents in this study possess higher educational level than men (Table 4-13). This can be explained by the earlier finding that the activities performed in this sector can be learned easily through direct exposure of the work done and the informal training given by household enterprises. The skills learnt from this training are not normally given in the curriculum of primary and secondary education. The finding shows that it is in fact this on-the-job exposure and training, which men have a relative advantage over women that matters more. This explains then why between the two, it is the women that are the ones who get terminated or laid off first.

In terms of age, the majority of those who lost their jobs as a result of the crisis are the younger workers, or those below 35 years old (66.7 percent). This particular finding points out two things. First, while enterprises may prefer younger employees than the older ones in the hiring stage, the same criteria are apparently also used when it comes to firing or laying-off workers. This could also reflect the relative difficulty of laying-off older workers, probably because of the amount and level of experience and skills they possess in line with their work. Household operators in the informal sector would rather keep their more experienced workers, even if keeping them means higher cost, if only to be globally competitive in the market.

Again, the proportion of women in this age category who lost their jobs is much higher (75.0 percent) compared with that of the men (57.1 percent). This leads us to advance the second view that while both young men and women share the adverse effects of the crisis, there is this tendency or preference---consciously or unconsciously---to pick on women workers (75.0 percent) over the men (57.1 percent) as the first ones to be laid-off or dismissed. In all this, it could be advanced that the younger workers---men or women---in the informal sector are the most insecure in their jobs. For while they can be easily preferred in the recruitment stage, they can also be easily fired or laid-off in cases of economic instability. But between the two, it is the women that are first to go in most instances.

Table 4-18. Employment status by educational attainment, sex, age and marital status

Most of those who lost their jobs in the informal sector are married (87.5 percent). Between the men and women, it is the latter that are adversely hit the most (94.1 percent). The preference to retain those workers who are single is quite noticeable. Only 12.5 percent of all single employees lost their jobs as a result of the crisis. But between the men and the women, there is this preference to retain those who are female and single. Only 5.9 percent of the women who are single lost their jobs, as against the 20.0 percent registered by the men who are single. Thus, if civil status were to be considered as primary, establishments tend to keep women who are single, rather than men of the same marital status.

In terms of job category, the hardest hit are the self-employed or own-account workers (25.0 percent), the employers (18.2 percent), and the homeworkers (16.9 percent). This is shown in Table 4-19. Women are again the hardest hit by the crisis in the following job categories: self-employed or own-account workers (28.6 percent, as compared to only 22.2 percent among men), homeworkers (20.0 percent against only 11.1 percent for men) and paid employees (12.8 percent against the 6.1 percent for men)). Men, on the other hand, are the hardest hit only in the employers category (27.3 percent compared with only 9.1 percent for women).

Table 4-19. Impact of the crisis on employment by sex and employment category

                The general findings indicated that indeed there are perceptible changes in the conditions of the various categories of workers in the informal sector over time, i.e., from 1998 to 1999, and that in many respects, these changes vary depending on sex, area or location and employment category.

                In particular, there are those who are adversely affected by the crisis. These are manifested in the loss of employment, difficulty in finding another employment, lesser incomes, reduced number of hours worked as well as difficulty in securing job contracts forcing respondent homeworkers to accept stiffer terms and conditions. For the small household operators, the negative impact of the crisis is experienced in the form of hardship in getting access to credit and financial assistance.

                But there are also those who are able to face the challenges and seize control of the opportunities that the crisis has brought. Their efforts eventually paid off in terms of higher benefits, higher incomes, more and better job contracts, and easy access to credit and loan facilities.

                A great majority of the respondents remain unaffected by the crisis.

                There are thus losers and gainers as a result of the financial crisis. The overall findings indicate that it is the women who bear most of the brunt of the crisis. Women employees experience most of the ill effects of the crisis in the form of job insecurity, reduction in income and benefits and decrease in the number of working hours. Women business operators, on the other hand, feel most of the adverse effects of the crisis in the areas of procuring raw materials, getting access to credit, securing job contracts and marketing their products.

                On the other hand, it is the men who are able to gain and benefit most from the crisis. Several explanatory factors have been advanced why this is so.  Some of these factors are endogenous to the individual worker like sex, education, age, marital status, work experience and training, and family roles and responsibilities, which have become standard indicators for measuring the success or failure of one’s work and employment. The other factors are exogenous to the individual like place of work, nature of the product, degree of business competition, as well as extent of support and assistance extended by the government.