Unemployment in Singapore rises to 2.4%, albeit lower than SARS and GFC era

Unemployment in Singapore rises to 2.4%, albeit lower than SARS and GFC era

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Singapore’s Labour Market Advance Release First Quarter 2020 provides highs and lows for the economy grappling with the impact of COVID-19.

On one hand, total employment (excluding foreign domestic workers or FDW) in Q1 2020 (-19,900) registered its sharpest quarterly contraction since SARS, due to significant contractions in foreign employment. These contractions were evident in all three broad sectors, with Services seeing the sharpest decline, as consumer-facing F&B services, retail trade and tourism-dependent accommodation were most severely affected.

On the other hand, while the seasonally adjusted unemployment rate rose in March 2020 from 2.3% to 2.4%; it still remains lower than the highs last seen during SARS and the Global Financial Crisis (GFC). In fact, in spite of difficulties, local employment still grew at a modest pace, as contractions in sectors listed above were buffered by increases in healthcare, public administration, and professional services.

The other key figure to note is redundancies. Overall, retrenchments in Q1 2020 (3,000) were higher than the previous quarter, Q4 2019 (2,670) but remained lower than the quarterly peak during the GFC (Q1 2009: 12,760).

On this, NTUC Assistant Secretary-General (ASG) Patrick Tay commented: “The coming months and the rest of the year will be challenging and I expect the unemployment and retrenchment figures to pick up.

“We need to keep a close watch on the retrenchment notifications and step up daily ground sensing to make sure that appropriate and timely help can be given to employers and workers, and to respond proactively like what we did through the past three rounds of budget measures to mitigate the effects of the protracted downturn.”

In an analysis by the Ministry of Manpower (MOM), the labour market is likely to see continued pressure. As stated in the report: “In weekly polls conducted by the Department, the proportion of companies who indicated an intention to reduce headcount or salary in the next two months has crept up, even though those with no intention to do so still formed the majority.”

To this, ASG Tay affirmed that for the first four months, many companies (especially the unionised companies) are leveraging support schemes such as Jobs Support Scheme and others to reduce costs and keep their workers on the payroll despite the Circuit Breaker period and business downtime.

“However, we also see companies embarking on various measures to manage excess manpower and cut costs eg. mandatory clearing of annual leave, leveraging flexible wage system, senior management wage cuts, no pay leave and leveraging on training schemes/absentee payroll subsidies etc,” he explained.

Advising on the way forward, ASG Tay urged employers and businesses to acquaint themselves with the support schemes including training funds to better manage and reduce costs, and minimise the need to delve into measures to manage excess manpower.

“Most importantly, this is also the time where employers and workers/unions need to have regular open communication, establish the trust and look out for each other. This will then put the organisation and its workers in good stead to ride out the storm and come out of it stronger and more resilient moving ahead.”

Image / MOM

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