Reaction Paper: The Nature, Consequences and Prospects of Underground Employment in the Four Major Cities of Metro Manila

by Gatchalian, Jose C., et.al., December 1986 Enrico C. Bagadion Plan 299 The study was undertaken with the view of trying to understand how certain economically distressed sectors of the urban economy cope up with the increasingly difficult demands of living in a city faced with soaring unemployment levels and dwindling incomes. In broad terms, the study sought to determine, using exploratory and descriptive tools of research, the nature, consequences and prospects of underground employment in four cities of Manila. With the aim of evolving policy recommendations regarding this area of research, the study specifically sought to profile the study participants, determine their livelihood activities, pinpoint the reasons for the thriving of the underground economy and describe the conditions under which they operate. Further, the study sought to identify existent and potential consequences of underground employment to income and savings generation, capital accumulation, and public health and safety issues. Documentation of the participants perceptions with respect to their future concerns formed the last part of the studys specific objectives. The analysis was based on a sample of 1,000 respondents engaged in underground employment using a combined multi-stage/purposive/convenience/stratified/simple random sampling. Four (4) major cities (Manila, Pasay, Caloocan and Quezon cities) were purposively selected. The districts and their corresponding business areas where the final sample units were to be taken were similarly purposively identified based on district population densities and places where people tend to converge (e.g., transportation terminals), the assumption being that population densities and convergence nodes are factors that spell the presence and intensity of activities pertaining to underground employment. The final sampling units (respondents) were randomly selected from among those plying the areas identified as the sampling frame. The designed interview schedule was pre-tested among 20 respondents who fit the description of the targets, but who were not included in the final data collection. Personal interview carried out in the vicinity where the respondents ply their trade was the primary method of data collection. The interviews were supplemented by written observations about the interviewees and their working environment.

The major findings of the study can be summarized as follows: 1. Those engaged in underground employment (UE) tend be in the economically productive age group composed of more women than men. 2. They live and work in sub-standard conditions, with barely enough earnings to cover basic needs. 3. UE is their only means of survival, considering their low levels of education and skills. 4. Working hours are variable, but majority of those engaged in UE work longer hours compared to those having formal, regular employment. 5. The amount of capital investment does not appear to be a major factor for entry into UE. 6. The status of being underground makes them vulnerable to official harassment, consequently creating a negative concept of government as far as this sector is concerned. 7. Health and safety risks are everyday conditions attendant to the UE workers trade. 8. The goods and services provided by the UE trade respond directly to the needs of those who make up the larger impoverished sector of the urban society; UE enables the respondents to retain hopes for a better future for their families. The study went on to recommend the adoption of policies that rest upon a positive view of the UE sector such as supporting and encouraging entities, like NGOs, engaged in providing social credit and technical assistance that benefit urban poor micro-entrepreneurs. More than restrictive government policies and bureaucratic regulations, efforts should be directed towards identifying means for buttressing the poors coping mechanisms with poverty, though not at the expense of disregarding public order, health and safety standards, the study suggested. The paper, with its choice and application of research tools and methodologies, is a good material for study and reference by students of research. Had it not been for logistical constraints that limited the scope of the study, the paper would have probably presented a more precise picture of the underground economy. A study of a larger and deeper scale, however, might require a different approach in methodology. In the course of reading the paper though, one can wonder if the present condition, where a seemingly large portion of the middle class is now engaged in some form of underground economic activity, was already existent at the time of the study and was inadvertently missed or was purposively ignored. One cannot help asking this question given the studys definition of underground and its scope.