Globalization to widen wage gaps in RP — WB

The wage gap between the skilled and unskilled workers in the Philippines is seen to widen further as a result of globalization, a World Bank report said.

The study, titled "Global Economic Prospects 2007: Managing the Next Wave of Globalization," said that for the Philippines, globalization would mean greater demand for skilled laborers, thus pushing up salaries for people in this segment.

However, the study pointed out that such in case is not welcome news for unskilled laborers. "Faced with competitive pressures as a result of continuing integration of markets, unskilled workers, as well as some lower skilled white collar workers risk losing their jobs or being stuck in their low-paying jobs," the World Bank said.

According to the international study, gains brought about by globalization could be accompanied by rising income inequality if the adverse effects are not managed well.

To combat this, the study proposes adopting mitigating measures as well as complementary policies that facilitate the movement of affected poor people to higher-paying jobs in industry and services.

Likewise, the report stressed that the shift from agriculture should be undertaken within a wider context of agricultural productivity and expanding opportunities in modern sectors, not through policies that discriminate against agriculture, where the poor can be found. The study has predicted the shrinking of the agricultural workforce in the coming years.

It has also underscored the important role that education can play in reducing poverty and inequality, as well as in managing the effects of globalization. The report calls for increasing educational levels accompanied by a strong investment climate to ensure productive jobs for the newly educated. The quality of education also needs to be maintained.

Joachim von Amsberg, World Bank country director for the Philippines, said the lending institution is ready to support the country in seizing global opportunities by sustaining progress in macroeconomic, fiscal reforms and improving economic governance where challenges still abound.

He said public policies can counteract the tendencies toward rising inequality by creating new opportunities that benefit low-income groups. He added that sustained macroeconomic and fiscal stability and openness to the global economy are essential for attracting more investments and creating jobs.