Increasing the level of labor-intensive jobs in services that are seen as important for growth, equality
The Philippine Institute for Development Studies (PIDS) said the government needs to support increasing labor-intensive jobs in retail, transportation and hospitality to boost growth and improve equity.
In a report dated December 23, the government think tank said that services, which are major contributors to gross domestic product and employment, have increased significantly in the productive and low-wage sectors.
“Improving productivity in labor-intensive services is critical to both growth and equity,” PIDS said.
The services sector grew by 5.5% in the third quarter, compared to 6.3% last year, the Philippine Statistics Authority said.
Wholesale and retail trade, transportation and storage, accommodation and food services, and other low-production industries account for 73.6% of total employment.
These sub-categories are dominated by low- to medium-skilled jobs and pay below-average wages, it added.
PIDS also noted that 68% of female workers are in the workforce, especially in the wholesale and retail trades, lodging and catering operations.
“Improving the productivity of these sectors while ensuring that women benefit from, rather than be disadvantaged by, productivity gains is essential to closing the gender gap,” it added.
“Services that are not really large employers, but have high forward communication, especially in the manufacturing sector, should also be the focus of policy reform, as product development in these sectors has positive results.fit has an impact on the entire economy,” said PIDS.
In addition, the think tank said companies can increase productivity by improving management practices, investing in new capital, improving employee skills and adopting new technologies.
Broad structural changes, although outside the control of individual firms, are needed to create a work environment that supports the development of the entire sector, he said.
“A strategic framework that includes key policy areas – the labor market, business and industrial development, technology, development, and structural change – can help increase the impact of public intervention in increasing productivity in services,” it said.
To deal with these challenges, PIDS said the government should use the Theory of Change framework to outline how the productivity of workers in services can be improved.
This approach will guide the design and implementation of specific interventions.
“A logical model, similar to the theory of change, provides the government with a strategic framework to effectively identify ways to link interventions to desired outcomes, adjust its investments to help firms and workers, and adopt appropriate policies,” said PIDS.
The paper “Increasing Labor Productivity in the Service Sector: Towards a Theory of Change and Some Design Options” was written by Ramonette B. Serafica, Queen Cel A. Oren, Emmanuel F. Esguerra, and Aniceto C. Orbeta, Jr. — Aubrey Rose A. Inosante
