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Slow salary growth forces Pinoys to become self-employed


MANILA, Philippines - More and more Filipinos are opting to become entrepreneurs since their income as wage earners have failed to improve. Slow income growth have prompted employees to quit jobs and set up their own businesses for better earnings, the Asian Development Bank (ADB) said, citing a study entitled “Quality of Jobs in the Philippines: Comparing Self-Employment with Wage Employment." In the period between 1994 to 2006, the earnings of salaried workers barely grew “except for those at the top end of the earnings distribution," the study said. “Comparing casual and self-employed workers, the results indicate that better educated workers are more likely to be engaged in self-employment as opposed to casual employment. Older workers are also more likely to be self-employed. When there are other self-employed workers in the household, the likelihood of the worker choosing self-employment also increases," the Manila-based lender said. The study’s most alarming finding was that despite the relatively steady economic growth exhibited by the Philippines in 1994 to 2006, with an average of four percent, growth of wages has been “lackluster." “Despite average gross domestic product growth of percent between 1994 and 2006, real wages have grown on average by only 1.12 percent," the ADB said. The National Statistics Office has reported that the self-employed Filipinos have reached 10.5 million in 2008. “What we can say with more confidence is that while a shift from self-employment to wage employment is under way, perhaps the fundamental weakness in the Philippine labor market is the slow growth in earnings," the ADB added. Other findings also showed that permanent employees received much higher wages than those casually employed. Those belonging to the services sector also enjoyed much higher wages than those in the industry sector or a growth of 1.84 percent against 0.05 percent. The higher growth in wages of female workers – 2.24 percent versus 0.5 percent for the wages of male workers – was sufficient to make the average wages of females higher than those of men by 2006," the ADB added. - GMANews.TV
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