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Corporate Securities Info

Wishful thinking

/ 05:15 AM November 20, 2017

Amid calls by the Social Security System (SSS) to increase premium contributions of members to avoid going bankrupt in 2025, Social Security Commission Chair Amado Valdez said the fund was looking into the possibility of giving unemployment benefits to members who lose their jobs without their fault.

The benefits would be given either for a fixed period of time, or until such time that the unemployed members are able to find another employment. In addition, they would be provided with funds for retraining or developing new skills for the same purpose.

According to Valdez, this scheme is aimed at mitigating the adverse effects of the increasing use of artificial intelligence (AI) in business which could lead to massive job losses.

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AI is defined as “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings. The term is frequently applied to the project of developing systems endowed with the intellectual processes characteristic of humans, such as the ability to reason, discover meaning, generalize, or learn from past experience.”

The impact of AI has been felt significantly in businesses engaged in assembly-type operations, e.g., automobile and machine manufacturing, where robots are able to perform precision repetitive work with accuracy, and the human element becomes material only at the end of the process.

According to reports, AI facilities that can replicate the work of call center agents in answering questions or attending to requests for assistance from customers are already in advanced stages of completion.

It’s just a matter of time before more Filipino workers find their jobs being taken over by robots or machines that do not have to be paid or given various benefits to motivate them to do their work well. The savings in labor costs that AI can bring—at the expense of human hands—are something that employers cannot be faulted for taking advantage of.

The proposed scheme is similar to the welfare system in the United States where individuals or families that are in dire financial straits are given food stamps, unemployment compensation and other forms of assistance by the government until they are able to fend for themselves again.

Although there is nothing wrong with preparing for future contingencies, SSS should prioritize the present needs of its 35 million members, especially the retirees who depend on their monthly pension for their daily sustenance.

The time and effort that SSS wants to spend to figure out how to spend more of its members’ money would find better use in improving its collection system, seriously running after employers who collect premium contributions from their employees but fail to remit them, and maximizing the returns from its assets and equity investments.

Sadly, the complaint filed by SSS Commissioner Jose Gabriel La Viña against four SSS officials for dishonesty and grave misconduct does not inspire confidence about the competence of the present SSS leadership to properly manage the hard-earned premium contributions of its members.

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If SSS is oozing with money and has a cash cow that assures it of a steady flow of revenues regardless of the rise and fall of the economy (both of which situations are clearly not applicable to it now), the idea of giving unemployment benefits to displaced members would not be a bad idea.

A government that can provide financial assistance to its unemployed citizens until they are able to find employment again would be an envy of the whole world.

However, the reality on the ground is that SSS is barely able to meet its obligations to its members with its present resources and is practically “begging” for additional funds by way of increased premium contributions.

There is nothing wrong with SSS aspiring to clone the US welfare system. Wishful thinking is not a crime in our country. Until better times come, it’s best that SSS focus its attention on the needs of its members now rather than on what they may want in the future.

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TAGS: increase premium contributions, Social Security System (SSS)
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