my Trade Tripper column in the recent weekend issue of BusinessWorld:
The Philippines today is a country of contradictions: it proclaims economic growth with rising unemployment, good governance with deteriorating infrastructure and broken transportations systems, progress with worsening traffic, and pleas for tolerance and gender equality with increased incidents of rape, teenage pregnancies and marriage annulments. But then, this is what happens when one wants all for nothing.
Unfortunately, this government’s vision (if it has one) does not seem to work for the simple reason that it cannot align with reality and common sense.
Consider that even though Filipinos are taxed the highest in ASEAN but with the lowest of wages (P5,500 a month will get you classified as middle class), it also has the highest unemployment rate. But what’s really disturbing is that almost 80% of our unemployed are from below 35 years old, the age considered most productive and yet formative. And 20% of the unemployed are college graduates.
The foregoing is within the context of the Filipino working among the longest hours. And those work hours do not include the two- to four-hour commute to and from work that many Filipinos go through every day, commuting hours that could get longer (according to the government itself).
Our people pay one of the most expensive rice in Asia, we have water scarcity among floods, and constant threats of power shortage.
The government’s solution, which is to throw money at the poor (via the Conditional Cash Transfer, or CCT), has not worked. And it doesn’t apply to our unemployed but educated population. Not only is there work scarcity, the disincentive to work is even greater.
I’ve long railed at the government’s progressive policy mind-set that, as David Brooks puts it, “aims to place individuals in unmediated dependency on a government” and encourages an entitlement culture. The President’s characterization of himself as the “father of the country” is indicative of that. But this has reached the level of ridiculousness: why make people dependent on the government when it can’t be depended on?
Because from the beginning, it can’t. Our society was constructed along the lines of self-governance and personal accountability, not “progressivism.”
But, in words that are applicable here, Paul Ryan (in a Wall Street Journal opinion piece) aptly describes the pitfalls of such thinking: “Over the years, we’ve slowly been adding to the number of benefits that government provides to an increasing number of our citizens. Some of those benefits are worthy, laudable commitments, but others aren’t really the responsibility of government or the kind of thing we can afford. If we keep on this way, we’ll reach a tipping point where there are too many people receiving government benefits and not enough people to pay for those benefits. That’s an untenable problem.”
There are severe limits to what the government can do, despite its propensity to think otherwise: “the tipping point we’re approaching is the result of a liberal progressive mind-set that seeks a larger, more active government and lets bureaucrats decide what’s best for everyone instead of allowing citizens to govern themselves. Its response to every social problem is more government, more bureaucracy and more taxpayer money.”
This column has warned repeatedly about the dangers of such an entitlement culture. But now, scientific data may even show that welfare entitlements like the CCT, no matter how huge the allotment, are futile at best.
The Economist reported a study published in the British Journal of Psychiatry that found that “families which had started poor and got richer, the younger children -- those born into relative affluence -- were just as likely to misbehave when they were teenagers as their elder siblings had been. Family income was not, per se, the determining factor.
“That suggests two, not mutually exclusive, possibilities. One is that a family’s culture, once established, is ‘sticky’ -- that you can, to put it crudely, take the kid out of the neighborhood, but not the neighborhood out of the kid. Given, for example, children’s propensity to emulate elder siblings whom they admire, that sounds perfectly plausible. The other possibility is that genes which predispose to criminal behavior (several studies suggest such genes exist) are more common at the bottom of society than at the top, perhaps because the lack of impulse-control they engender also tends to reduce someone’s earning capacity.
“Neither of these conclusions is likely to be welcome to social reformers. The first suggests that merely topping up people’s incomes, though it may well be a good idea for other reasons, will not by itself address questions of bad behavior. The second raises the possibility that the problem of intergenerational poverty may be self-reinforcing.”
Our constitutional system espouses the principles of subsidiarity, solidarity, virtue, strong traditional families, self-responsibility, and the common good. All of these have specific meanings that have centuries of thought and experience behind them. Perhaps the government would like to acquaint itself with these before tinkering around with progressive social programs that do nothing but throw away huge amounts of the people’s money.