Employment might have risen, but I wouldn’t pop the champagne just yet if I were the administration.

The government was celebrating the release of third quarter employment figures after the disappointing GDP figures for the same period broke its pledge for a second semester rebound. The fact is, although more people were indeed working, they were on average working less hours.

The proportion of people working less than forty hours a week rose both as a proportion of the work force and in aggregate. It rose from 12.8 million in October 2010 (or 35% of employed people) to 14.3 million last October (or 37% of the same).

As a result, output per worker fell. It fell by 2.4%. We derive this by subtracting the GDP growth rate of 3.2% with the employment growth rate of 5.6% or by simply dividing the total GDP by the total employed persons (the government websites don’t provide statistics on total hours worked, so we can’t work out whether output per hour worked—a more accurate measure of labour productivity—fell).

Some would say that productivity is an even more significant indicator of economic health than GDP because it compares both the outputs of an economy (GDP) with its inputs (workers). The breakdown by sector shows that the decline in productivity (as measured by the statistics office as Gross Value Add over number of employees) was largest for industry which suffered a 4.2% decline, followed by agriculture which suffered a 3.1% decline, and lastly came the services sector which registered a fall of 1.1%.

The government through Sec Paderanga claimed credit for the growth in employment saying that its policies were responsible for generating more new jobs in the economy. One has to qualify the positive news by saying that these jobs were mostly part-time in nature. As a result, there may be more people working, but on average they worked for less hours, adding less value to the economy.

Doy Santos aka The Cusp

Doy Santos is an international development consultant who shuttles between Australia and the Philippines. He maintains a blog called The Cusp: A discussion of new thinking, new schools of thought and fresh ideas on public policy (www.thecusponline.org) and tweets as @thecusponline. He holds a Master in Development Economics from the University of the Philippines and an MS in Public Policy from Carnegie Mellon University.