"Bear in mind that the wonderful things you learn in your schools are the work of many generations, produced by enthusiastic effort and infinite labor in every country of the world. All this is put into your hands as your inheritance in order that you may receive it, honor it, add to it, and one day faithfully hand it to your children. Thus do we mortals achieve immortality in the permanent things which we create in common." - Albert Einstein

Thursday, October 16, 2014

Basic Education Is Not a Cure for Unemployment

Though it sounds attractive to a lot of people, the suggestion that education is the solution to high unemployment should be taken with a great deal of skepticism. If the reason behind unemployment is lack of skills then the number of jobs available must be high enough to support this hypothesis. The fact is that unemployment is not so much about not being able to fill positions but more about no positions to be filled. Unemployment oftentimes is caused by a low number of jobs available. As Laurence Mishel pointed out in a report published by the Economic Policy Institute, even in the United States, there are college graduates who are unemployed.
Above table copied from
Education is Not the Cure for High Unemployment or for Income Inequality
The employment situation in the Philippines is no exception. It is clearly wrong to suggest that the unemployment is due to some gap in skills. Laborers and unskilled workers comprise the majority of the employed in the Philippines. And according to the National Statistics Office of the Philippines, about one in five of the unemployed is a college graduate.

Therefore, to claim that a new curriculum (DepEd K+12) can cure unemployment is disingenuous. Yet, business leaders in the Philippines seem to continue to tout this fallacy:

Above copied from GMA News
The above news article also attempts to explain how and why the new curriculum could improve the chances of getting employed by citing the case of workers in fast food restaurants. Graduates of the new curriculum apparently are now going to be qualified to flip burgers and sell fries. Such view completely ignores market forces in employment. The fact that these restaurants are hiring college graduates is not because graduates of the old high school curriculum are incapable of unskilled labor. In the United States, the following table summarizes the characteristics of fast food workers:

Above table copied from
Slow Progress for Fast Food Workers
In fact, it is a common misconception that only high school students work at fast food restaurants but this group does comprise about 30 percent of the total workforce. And these teenagers are not paid with lower wages:

Above table copied from 
Slow Progress for Fast Food Workers
College graduates and undergraduates find employment in fast food services not because these positions require a great deal of skills or training but because these college graduates cannot find jobs in their field. Schmitt and Jones at the Center for Economic and Policy Research wrote:
The wage structure for non-teenagers in the industry is almost identical to the overall distribution (the second column in the table above). Older workers in fast-food have little to show for their additional education, age, and experience. 
The majority (53 percent) of workers in fast-food are adults (21 and older) with a high school degree or more, which you would never guess from the way the industry pays.
Clearly, there are other more important reasons why people are unemployed. Lack of skills is unfortunately not the most important one. The reason why there is high unemployment can be as simple as: "There are no jobs".




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