MODULE 3 EMPLOYMENT SOLUTION MATRIX

INTRODUCTION
Module One and Two thought us to understand the basic concepts used in
understanding the labor market. This knowledge allowed us to identify the
important indicators of the so called state of health of our labor market as well
as use the tools to examine their nature and behaviour. But understanding alone
will not improve the lives of our workforce, finding solutions to unemployment
and applying them will. Looking at possible specific solutions and coming up with
new programs is the object of this Module.
Learning Objectives
At the end of the lesson the trainees will be able to:
1. Explain the use of the Employment Solution Matrix in relation to reducing
unemployment and underemployment
2. Identify various issues and problems confronting the implementation of the
different aspects of the ESM
3. Formulate policies and recommendations in resolving underutilization of
labor within the framework of the ESM

Topics
1. Managing Unemployment
2. Employment Solution Matrix
3. The Four ( 4 ) window model of PESO

To use this workbook you have to follow the Learning Guide. Make sure to follow
the learning steps sequentially.

Learning Guide
Module 3. Employment Solution Matrix
Learning Steps
1. Read Information Sheet 9-Managing
Unemployment
2. Read Information Sheet 10Employment Solution Matrix
3. Listen to the presentation on
Employment Solution Matrix
4. Listen to the presentation on the
Four Window Model of PESO

Resources
1. Information Sheet 9- Managing
Unemployment
2. Information Sheet 10
Employment Solution Matrix
3. PowerPoint presentation on
Employment Solution Matrix
4. PowerPoint presentation on- The
Four window model of PESO

5. Answer Self Check 4

5. Self Check 4

6. Compare answer to model answer

6. Model Answer 4

7. Perform activity 5-Employment

Solution Matrix

7. Activity Sheet 5- Employment

Solution Matrix
8. Group Output Template

8. Present group output in a plenary

INFORMATION SHEET 9- MANAGING UNEMPLOYMENT

A. BACKGROUND
1. At the macro level, there is unemployment in this country since the growth of its
labor force is greater than that of employment slots in the labor market. Aggregate
supply of jobseekers out number aggregate demand for their services.
2. To make unemployment equal to zero, total supply must match total demand or in
the presence of unemployment backlogs, the growth of demand must high enough
to absorb the incremental supply plus the backlog. In this case equal incremental
growth of supply and demand will not eliminate unemployment.
3. If the growth of supply will continue to outpace that of the demand, the
unemployment backlog will keep on increasing from one period to another.
4. While unemployment cannot be reduce to zero in the real world, governments can
exert efforts that would influence the growth of either the supply of or demand for
labor or institute measures to control both variables, and bring the unemployment
rate to economically and politically acceptable levels.
5. The countrys 10 to 13 % unemployment rate is a matter of concern. In absolute
terms it means 3.5 to 4.5 million jobless Filipinos. Their potential contribution to
the economy will never be realized unless they are given the opportunity to do so.
6. Clearly, we have to look at our options on the supply and demand side and
combination of actions that can affect both sides and take action.
B. SUPPLY SIDE OPTIONS:
There is over supply on the aggregate in the labor market and there is a need to
arrest its growth to decrease its volume.
To do this we can:
a. Manage our population growth where our labor force is coming from. A
significant decrease in our population growth rate today will eventually
affect labor supply 15 years from now. DOLE should take a stand on the
issue of population management and initiate actions that would determine
the views and sentiments of labor and management.
b. Significantly increase migration to other foreign labor markets who are in
short supply of labor. This means strengthening our overseas deployment
and marketing program as well as the protective mechanism for our OFWs.
The overseas program has greatly decreased competition for available jobs
in the local labor market. A decrease in overseas deployment will intensify
the already long lines of applicants in the market. In this area DOLE has to

take a long hard look at the prevailing excess doctrine that governs the
overseas programs and initiatives. Today maybe the proper time to make
the overseas employment program be part of the countrys development
strategy.
c. Make available adequate opportunities for worker re training/ re skilling so
as to make them adaptable to rapid changes in the labor market brought
about by fast changing technology and globalization. Industry based as well
as public/private training facilities must be made available to the existing
workforce, particularly those in transition.
d. Make available an efficient and effective employment exchange system that
will greatly reduce the waste brought about by prolonged job search and
unfilled vacancies. This public exchange system is to focus itself to the
groups that are considered vulnerable and less competitive in the labor
market. The use of the latest communications technology would make the
present network of employment service more responsive to jobseekers. In
this area there is a need to review the present PESO law to make the
management and ownership of the offices fully transferred to the local
governments and non- government organizations.
C. DEMAND SIDE OPTIONS:
To help in creating employment the following can be done:
a. Push for investments by government and the private sector in areas with
high bias for labor use. To do this, the Secretary of Labor and
Employment must sit in bodies that make decisions that have significant
effects on labor use, e.g. Board of Investments and the Monetary Board.
The countrys Small and Medium industry is considered to be very labor
biased and should be given strong support from government, in terms of
incentives and other support. Existing wage policies and other labor
regulations relevant to employment promotion prevailing in this sector
must be reviewed.
b. Encouraging the utilization of labor based technologies in simple public
works projects especially in the construction of farm to market roads. The
Congressional Allocations or CDF of Senators and Congressmen
could be focused towards projects that will contribute to employment
promotion and creation. In this way the legislators will be not only be
able to provide the needed infrastructure facilities in the rural areas
but greatly contribute to the growth of employment and income. The
use of labor biased methods in construction can be made a requirement of
contractors bidding for projects funded from the CDF of our legislators.

c. Sustain support to high employment generating sectors like agriculture,

garments and tourism.
d. Promoting Self-employment and Entrepreneurship in the rural and urban
informal sectors without unduly formalizing them. The informal sector
is the sponge that readily absorbs the excess labor force from the three
major sectors whenever there are downturns. Its easy in- easy out
character makes it a very good alternative to formal employment.
Assistance to this sector however, will have to be limited to the point
where they are not formalized losing their inherent viability. The
Department must integrate its existing self employment resources to attain
stronger impact on this area.
D. OTHER AVAILABLE OPTIONS
a. One measure that might be able to help increasing employment is the Retire and
Employ Strategy or REmS.
This strategy entails the reduction of the mandatory retirement age from 65 to 60
or even to 55 both in the public and private sector. The reduction will have the
following effects:
a. The slots left by the retirees will be immediately available to the new
entrants to the labor market. There will be an acceleration of the
absorption capacity of the labor market.
b. The retirees education and experience will make them very trainable as
entrepreneurs who can in turn create employment for others
c. The government if it chooses not to replace the retirees will be able to save
resources and help streamline the bureaucracy and reduce the budget
deficit.
This retire and employ strategy could be financed from the retirement fund or
from additional borrowings. The DOLE who will take the lead should be able to
provide self-employment and entrepreneurship programs in cooperation with the
Civil Service Commission, the SSS and the GSIS. The employment generating
potential of REms is big considering the number and amount of retirement
resources and the number of retirees.. Moreover, attempts in making the poor
and the less educated to become good and successful entrepreneurs has not really
been successful.
b. An effective and judicious maintenance of industrial peace which leads to the
preservation of existing employment and at the same time contribute to more

foreign and domestic investments thus creating more jobs. In this area the
Department has to look into existing laws and regulations that prevent rather than
promote industrial peace.

SELF CHECK 4

1. What are supply side strategies in the labor market? Name at least two
and if you were a policy maker would you retain or eradicate them and
why?
2. Is zero ( 0 )unemployment level possible? Why or Why not?

MODEL ANSWER TO SELF CHECK 4

1. Two possible strategies would be population management and migration.

Population controls could reduce pressure on the labor market if its growth
could translate into labor force growth that would be compatible to job
growth. Migration can reduce labor supply by 2-3 million aside from its 15
billion dollar annual contribution to the economy.

2. It is not attainable since there is always persons unemployed at any time

in an economy consistent with what they call a natural rate of
unemployment ( NRU ). In the U.S. full employment would be about 4%
unemployment rate. These are the so called transitory unemployed
persons who are just transferring from one job to the other.

INFORMATION SHEET 10. Employment Solution Matrix

Managing Unemployment discussed the macro approach to reducing

unemployment This topic will take on the possible causes of unemployment and
present specific measures/solutions that could be adopted by national as well as
local governments ( LGUs ). These five aspects of employment could be
simultaneously done in combination with each other. Focus however on solutions
that are more urgent could be undertaken depending on the particular labor
market situations.
There are five aspects of employment that can be studied for a more
comprehensive approach to attacking labor underutilization.
1. Employment Policy.
This is a statement of what we want to do in the area of employment. One
such document is the Labor Code of the Philippines and pertinent laws on
Labor and Employment.
Locally it refers to the LGUs thinking and attitude employment. These
attitude are embodied in the employment and local development plans,
outward looking vs inward looking strategies, Hiring and Training policies.
2. Employment Creation
This refers to the measures being done by national or local government
with the end in view of affording employment opportunities to their
workforce.
This measures can either be long term or short term . Examples of long
term measures are investment promotion programs, taxation review,
CLUP, skills mapping and others.
An example of short term measure is an emergency jobs program.
3. Employment Facilitation
This refers to the efficient allocation of labor through information provision.
Some of the mechanisms are:
a. Employment Service like PESO, Private entity (Fee Charging), Private
entity (non-fee charging), media, websites
b. Career Guidance / Counselling
Examples are the YP4SC of TESDA and Career Guidance Programs
of High School

4. Employment Enhancement
This refers to the provision of training, education and qualifications for
purposes of direct employment.
Some of the mechanisms available are provision of Basic and Higher
Education and provision of Technical Vocational Education and other
upgrading programs.
Some of the issues here are relevance of programs, access and equity.
5. Employment Preservation
This refers to the provision of conditions conducive towards the
maintenance and growth of existing establishments.
The mechanisms are peace and order, industrial peace and business
friendly .

Activity 5. Employment Solution Matrix.

Your facilitator will group you according to your province or region or affiliations.
Given your familiarity with your local governments and your respective labor
markets, examine the 5 aspects below and using your local government as the
reference identify the issues/ problems in each of the areas and prepare a
group relevant recommendations to improve LGU/ Community performance.
Report your group output in a plenary.

5 E ASPECTS
E Policy

E Creation

E Facilitation

E Enhancement

E Preservation

Issues/Problems

Recommendations