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EMPLOYMENT RATES IN MANUFACTURING INTDUSTRY

Chong, Dino Bryan S15 chonggy27@yahoo.com Cunanan, Katryne Nicole S15 kae_c13@yahoo.com Sison, Florence Andrea S15 oyeng_8@yahoo.com So, Jenny Lyn S15 jennyso_37@yahoo.com College of Computer Studies Bachelor of Science in Information and Communications Technology Management
ABSTRACT Manufacturing is transforming raw materials to finished goods with the use of machines, tools and labor. Since technology is evolving very fast, new machines are being introduced to the Manufacturing Industry. The main issue in this situation is whether these technologies might replace human labor in the manufacturing industry. Are machines better than humans? Why does the manufacturing industry invest on these machineries? What are the advantages of working with these technologies? And what are the disadvantages of using these machineries? By tackling these questions, it can help in answering whether this issue is really happening in manufacturing industry especially here in the Philippines. 1.0 INTRODUCTION In general, Manufacturing Industry refers to those industries which are involved in the manufacturing and processing of items and indulge in either creation of new commodities or in value addition. Currently, Manufacturing Industry accounts for a significant share of the industrial sector in developed countries. Manufacturing industries are the major wealth producing sectors of an economy. These industries use various technologies and methods widely known as manufacturing process management. Manufacturing industries are broadly categorized into engineering industries, construction industries, electronics industries, chemical industries, energy industries, textile industries, food and beverage industries, metalworking industries, plastic industries, transport and telecommunication industries. Manufacturing industries are important for an economy as they employ a huge share of the labor force and produce materials required by sectors of strategic importance such as national infrastructure and defense. However, not all manufacturing industries are beneficial to the nation as some of them generate negative externalities with huge social costs. [1] 2.0 BACKGROUND Manufacturing accounts for roughly 71% on the average of industry output and 24.6% of gross domestic product (GDP) for the period 1986-2007. The share of manufacturing to GDP peaked at 29% in 1974 before eventually bottoming out to 23% in 2007. Further, the ratio of manufacturing to GDP is higher than that of the agriculture sector. [2]

Source: ADB, SDBS Key Economic Indicators

Figure 1 Share of Manufacturing to GDP vs. Other Sector The employment rate estimated for July 2008 was 92.6 percent. This implies that nine in every 10 persons in the labor force were employed in July 2008. The current figure is not significantly different from the July 2007 rate which is 92.2 percent. The July 2008 LFS also revealed that the labor force participation rate is 64.3 percent. This means

that the size of the labor force in July 2008 was approximately 37.3 million out of the estimated 58.1 million population 15 years and older for that period. Compared to the labor force participation rate in July 2007 (63.6%), the July 2008 rate is higher.
Philippines Total 15 years old and over (in '000) Labor Force Participation Rate (%) Employment Rate (%) Unemployment Rate (%) Underemployment Rate (%)
Notes:
1/ 2/

July 2008 1/ 58,119 64.3 92.6 7.4 21.0

July 2007 56,857 63.6 92.2 7.8 22.0

Our research showed that the workforce in the manufacturing industry comprises of about 5 million Filipino workers. The advancement in technologies might affect the lives of these people since a lot of companies now are investing in machines to replace manpower. The reason for the downward trend in the manufacturing employment is due to the increase of electric machinery. The main reason for this transition is that machines have the ability to do work continuously without resting and complaining. They are more accurate and the production time faster. The slower growth is attributed mostly to electric machinery. Are machines better than humans? No, since humans are the ones who invent and create the machine to be used. We only develop a machine to help and lessen our workload. In the end the machine cannot operate without the help of humans. There are aspects in which the products produced by the machine are more consistent than manpower, since machines are more accurate and repetitive of its actions and process. But the machines cannot replace the beauty and elegance of hand made products which is more valuable in price and quality. Why does the manufacturing industry invest on these machineries? The manufacturing industry invests in machine technologies to become adaptable and competitive in the industry. These companies which invest in machines are aiming for long term benefits, since the machine can work/stay longer than the employee unless the machine breaks down. The effect of acquiring technological machines would be long term savings and faster production time. Advantages and Disadvantages of Machine Advantages Long term use Can work 24 hours Faster production time Accurate and more precise Disadvantages Breaks down Needs manpower to operate High investment costs Cannot decide on its own

Estimates for July 2008 are preliminary and may change. Population 15 years and over is from the 2000 Census-based population projections. Source: NSO

Table 1 Employment Rate in July 2008 More than half (50.2%) of the total employed persons in July 2008, which was estimated at 34.6 million, worked in the services sector, with those engaged in wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods comprising the largest sub-sector (19.1% of the total employed). Workers in the agriculture sector comprised 35.0 percent of the total employed, with workers in agriculture, hunting and forestry making up the largest sub-sector (30.9% of the total employed). Only 14.8 percent of the total employed were in the industry sector, with the manufacturing subsector making up the largest percentage (8.5% of the total employed). [3] 3.0 ISSUES

Advantages and Disadvantages of manpower Advantages Adds employment to the country Better hand-made products
Source: Bureu of Economic Analysis; Bureu of Labor Statistics

Figure 2 Real Manufacturing Output and Employment

Human judgment Faster to acquire

Disadvantages Attitude problems (tardiness, absenteeism, laziness) Limit in working capabilities Gets Sick Harder to manage

The data above shows the pros and cons of manpower against machines. As you can see the diagram shows that manufacturing is really a big part of the philippine industry. It comprises 23% of the total GDP of our country. Manufacturing is using machine and human labor in converting raw materials into finished goods through a series of processes. This industry gives job opportunities to people because of its complex and strenuous processes. It also contributes a lot in the country’s economy. It is considered as a wealth-producing sector in the economy. The Philippines has abundant natural resources. These resources can be used in manufacturing finished products that can be sold in and out of the country. It is a labor- surplus country and labor-intensive industries are being encouraged by the government. But manufacturing, an industry which only makes a small contribution to employment, is still progressive here in the Philippines. As the years go by, more technologies are being invented. These technologies are being used in making work easier, faster and more efficient. Many industries are already using technologies and they keep on upgrading and replacing these technologies with new ones. The Manufacturing Industry is one of the industries that benefits from these technologies most, which means lesser employment rate. 4.0 Conclusion There is really a downward trend in the manufacturing employment due to the increase of new machineries and advancement in technologies. It might be an opportunity for Information Technology graduates but it would greatly affect the masses. Since the workforce of the Philippines comprises of Filipinos who did not finished their education. These people will lose their jobs if they do not adapt to trend of technology. It is not their fault that they remain to be factory workers for the rest of their lives since these people only want to support their families. The government should be to blame for making Philippines a third-world country. There would be less demand for factory workers because of the widely available machines that not only makes production of goods faster, but at times even better. This issue can be resolved by giving free seminars and trainings to the workers on how to use different technological advancements in the manufacturing industry supported by the government. There is always hope and this ethical issue can be solved by cooperating with the government. Though the phenomena of robotics and automation in the industry will be an ongoing technology trend, manufacturing jobs should not stay still. The nature of these jobs will also follow the technology trend. In result, the

government and non-government organizations (NGO) should help and provide most factory workers with technical trainings to help them adapt to the trend. We as students of Information Technology can create an e-learning website to help teach the factory workers about handling technology. With cooperation, we can create a wiki site in which everybody can share knowledge in handling technology towards the manufacturing field. 5.0 REFERENCES [1] Economy Watch, “Manufacturing Industry,” http://www.economywatch.com/worldindustries/manufacturing/, n.d. [2] Congressional Planning and Budget Department House of Representatives, “Facts in Figures,” Congress of the Philippines, http://www.congress.gov.ph/download/index.php?d=archive s [3] Ericta, Carmelita, “Employment Rate Reported At 92.6 Percent In July 2008,” Press Release, http://www.census.gov.ph/data/pressrelease/2008/lf0803tx.h tml, July 2008. [4] Kidder, David, Kalehoff, Max, Barnett, Jim, & et. al, “Man Versus Machine: The New Conundrum of Web 2.0 Advertising Automation,” Web 2.0 Expo, http://www.web2expo.com/webexny2008/public/schedule/d etail/3699, September 2008 [5] Martin, Samuel, “Maintaining Jobs and Work Through Machine Automation,” Articlesbase, http://www.articlesbase.com/business-articles/-maintainingjobs-and-work-through-machine-automation-233291.html, October 2007 [6] Federal Reserve Bank of Cleveland , “Economic Trends,” http://www.clevelandfed.org/research/trends/2007/0307/02e coact_021507-3.gif, March 2007