Growth, Employment and Wage Performance in the Manufacturing Sector : A Comparative Study of Japan and the Philippines

This paper looks into the "growth vs. equity" issue by comparing wages and employment in the manufacturing sector in the Philippines and in Prewar Japan (with special emphasis on the period before 1920). On the whole, it seems that the growth of the manufacturing sector contributed more to increased inequality in the Philippines than in Japan. To some extent, this might have been due to the effects of government policies in the Philippines. Thus, changes in policies may lead to both increased growth and reduced inequality. It is also very possible, however, that the growth of the manufacturing sector in the Philippines contributed more to increased inequality than in Japan (or failed to make for a narrowing of income disparities) because of more basic and non-policy induced factors. The differences between the size-structures of factory employment in the Philippines and in Prewar Japan, for example, are not as striking as suggested by a superficial comparison of factory statistics of the two economies. The major dissimilarities between the manufacturing sectors of the two economies can be found in the unorganized sub-sectors and the rather early setting in of dualism in Philippine manufacturing. As such, nothing short of a sustained boom in export of manufactures may be required to make growth and equity objectives complementary.