Workers fired from regular jobs face not only outright income losses but also diminished employment prospects, and potentially catastrophic and fatal health risks. They are also likely to stop sending children to college because they can no longer borrow money.

Almost seven of every ten workers who lost wage-paying jobs are unable to find similar work even after five years of looking, according to a case study sponsored by the Angelo King Institute of the De La Salle University and presented before a labor assembly over the weekend.

The study, based on a survey last year of workers fired from garments maker Novelty Phils Inc. in Paranaque city in September 2003, also found that laid-off workers are likely to get sick from a variety of ailments ranging from frequent headaches to hypertension and strokes.

“In more than a few cases, these illnesses lead to workers’ death,” said the study’s author, economist Clarence Pascual, who spoke before a forum sponsored by the party list group Partido ng Manggagawa (Workers’ Party) over the weekend.

The case study, while based on only 150 respondents, raises important issues that government, employers and labor groups should take into consideration in crafting tripartite plans to address the impact of the global financial crisis on jobs in the Philippines. It is one of the few studies that look at plight of displaced workers and their chances of finding jobs again after being laid-off.

The Department of Labor said that more than 40,000 workers have lost their jobs since late last year while another 33,000 have seen their pay cut because of flexible work arrangements. Government and private economists believe job losses could reach a few hundred thousands more as global economic downturn continues.

Wilson Fortaleza, leader of the Partido ng Manggagawa, one of the few labor-based parties that won a seat at the House of Representatives, said the government’s usual programs to create employment, such as sponsoring one job fair after another, will not work amid the sharp economic slowdown.

He said: “The study covered a period when the economy was doing relatively well – GDP growth reached 7.2 per cent in 2007 -- and yet most of workers surveyed could not find jobs. How much more now that the economy is slowing?”

Pascual said one implication of the study is the need for the government to commit to a strategy of full employment, and expanded short-term relief measures.

Being fired from a job is extremely costly to workers and their families, he said. On average, displaced workers from Novelty who managed to land another wage job took a year and two months to find work. But only 32 per cent did so in the five-year period between 2003, when they were fired, and 2008 when the survey by conducted. As of last year, only 16 per cent had wage work. Worse, the current jobs paid almost quarter less than the previous jobs.

Pascual also urged the government to consider offering unemployment assistance, extended free health coverage, and educational loans and scholarships for children of displaced workers.

He said the Philippine Health Insurance Corp., which has built up retained earnings of almost P30 billion on top of its reserve fund of P37 billion -- in part by paying out less benefits to private sector workers than their contributions – should continue to cover displaced workers unable to pay premiums for five more years instead just three months.

“With the loss of work-related health insurance, laid off workers cannot afford the high cost of drugs and health care. Loss of health insurance can also impact on young children,” he said.

He added the Social Security System should use its vast resources, also built up from contributions of private-sector employees, to provide direct assistance, scholarships and educational loans to displaced workers rather than investing in an “economic stimulus package” of dubious economic and investment merit.

Pascual noted that loss of regular jobs also increases the risk of children stopping going to school, especially college.

“Surprisingly, production workers despite minimum level wages were able to send children to college, relying on loans from employers, friends and informal lenders,” he said. “Their regular job was their biggest asset, a gold-standard collateral in the eyes of creditors. The loss of a regular job means loss of access to credit, which could mean children dropping out of school or the inability to meet costly contingencies.”

The Partido ng Manggagawa has outlined a five-point “bail-out package” for labor that it is urging the government to adopt in programs to address the economic slowdown. These include: subsidy from SSS, Government Service Insurance System (GSIS), and Overseas Workers Welfare Administration (OWWA); tax refund equivalent to two months salary; government employment program to help the three million unemployed; Philhealth coverage for workers affected by layoffs that would last until they find a new job; and moratorium on the eviction of alleged illegal settlers.