Employment in 1Q 2020 fell the most since SARS outbreak in 2003: MOM

·Editorial team
·5-min read
FILE PHOTO: Yahoo News Singapore
FILE PHOTO: Yahoo News Singapore

SINGAPORE — Singapore’s labour market in the first quarter (1Q) of 2020 registered its sharpest drop since the SARS epidemic in 2003, reflecting the early impact of the ongoing COVID-19 pandemic.

According to preliminary estimates released by the Ministry of Manpower on Wednesday (29 April), the total employment (excluding foreign domestic workers) fell by 19,900, largely due to a significant decline in foreign employment.

The drop in total employment was the sharpest since the second quarter of 2003, when it fell by 24,000.

Contractions in three industries

MOM said in a media release on Wednesday that the employment contractions were observed broadly across the manufacturing, construction and services industries.

Services experienced the sharpest decline, as consumer-facing food and beverage (F&B) services and retail trade, as well as tourism-dependent accommodation were most severely affected by the COVID-19 outbreak.

Local employment still managed to grow at a modest pace, despite the difficulties since the start of the COVID-19 outbreak, as well as seasonal influences.

Contractions in wholesale and retail trade, F&B services and accommodation were offset by increases in healthcare, public administration and professional services.

However, workers who remain in employment may have experienced reductions in working hours or adjustments in their salaries.

Unemployment lower than peak during SARS

The unemployment rate rose in March 2020 but remained lower than the peak during SARS. Similarly, retrenchments in the 1Q of 2020 were about one-quarter that of the quarterly peak seen during the global financial crisis in the 1Q of 2009.

Overall, the unemployment rate rose from 2.3 to 2.4 per cent, with similar increases among residents (3.2 to 3.3 per cent) and citizens (3.3 to 3.5 per cent).

For now, they remain lower than the highs seen during the SARS epidemic, when unemployment rates were at 4.8, 6.2 and 6.4 per cents for overall, resident and citizens respectively in September 2003. They are also lower than those during the global financial crisis in September 2009 (3.3, 4.9 and 4.9 per cents for overall, resident and citizens respectively).

Retrenchments cushioned by jobs and wage support measures

Overall retrenchments were estimated at 3,000 in 1Q of 2020, higher than the previous quarter (2,670) but significantly lower than the quarterly peak of 12,760 in 1Q of 2009.

MOM said that, with jobs and wage support measures announced in this year’s Budgets, and companies encouraged to retain workers and retrench only as a last resort, layoffs did not see a sharp increase in this first quarter.

Services saw an increase in retrenchments, mainly in consumer-facing retail trade and F&B services as domestic consumption fell when safe distancing measures kicked in.

Tourism-dependent accommodation also experienced more retrenchments amid a drop in visitor arrivals. The number of retrenchments remained similar in manufacturing and construction.

Conditions likely to get worse in next quarter

MOM said that labour market conditions are likely to worsen in the upcoming quarter, given the sharp fall in demand globally as well as in Singapore as firms adjust to circuit breaker measures.

For now, Budget relief measures to support workers and businesses may have helped to cushion the overall impact, especially on local jobs.

Some of the relief measures are:

  • the Jobs Support Scheme, whereby the government is subsidising 75 per cent of gross monthly wage for the first $4,600 of wages paid in April and May, for local employees in all sectors. This helps workers keep their jobs and enable businesses to resume operations quickly when the circuit breaking measures are lifted.

  • New programmes by Workforce Singapore (WSG) to help employers in sectors directed affected by COVID-19 (tourism, aviation, retail and food services) re-skill and redeploy their workers to new jobs within their companies. The duration of funding support for existing and new redeployment programmes in these sectors has been extended from three months to a maximum of six months.

  • The SGUnited Jobs initiative helps to match job-seekers and affected workers with job opportunities. The initiative seeks to create about 10,000 jobs over the next year in public service, healthcare, early childhood care and education, and social services. There are also temporary jobs to handle the increase in COVID-19-related operations, or to cope with disruptions in the labour supply.

Focus on re-skilling as economy transforms

MOM said that, beyond the near-term challenges brought on by COVID-19, Singapore should be focusing on keeping its workforce equipped with relevant skills as the economy transforms.

The ministry and WSG, together with tripartite partners, will be enhancing efforts to help individuals to re-skill and access good jobs. Through the recently-launched SkillsFuture Mid-Career Support Package, the government will also provide additional support for mid-career workers in their 40s and 50s by helping them stay employable and take up new jobs or new careers.

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