Tuesday 16 June 2020

Singapore's total employment figures see biggest quarterly drop: Labour Market Report First Quarter 2020

Numbers down by 25,600 in Q1; fall largely due to cutbacks in foreign worker numbers
By Sue-Ann Tan, The Straits Times, 16 Jun 2020

The first three months of the year saw the steepest fall ever recorded in the number of people employed here, compared with the previous quarter, and there is worse to come.

The total number of people working, excluding maids, fell by 25,600 in the three months to March 31 - the biggest quarterly contraction on record.

Much of the decline was due to significant cutbacks in the number of foreign workers. But local employment also dropped slightly due to a sharper-than-expected fall in headcount in the trade and tourism-related industries, said the Ministry of Manpower in its labour market report for the first quarter.

The contraction in the number of those employed was worse than the estimated drop of 19,900 outlined in preliminary data.

Retrenchments also increased over the quarter, while the seasonally adjusted number of job vacancies fell to the lowest level since September 2010.

But the employment situation has yet to hit rock bottom as the circuit breaker measures kicked in only during the second quarter.

Manpower Minister Josephine Teo said: "In January, there was still a lot of new year festivities... In February, tourism was already quite badly hit, but the further travel restrictions that we see today had not yet started.

"In other words, the full effects of Covid-19 certainly have not been felt in the first quarter."

The unemployment rate for citizens rose to 3.5 per cent in March from 3.3 per cent last December, after accounting for seasonal variations. Total unemployment stood at 2.4 per cent, still well under the previous high of 4.8 per cent in September 2003 following the severe acute respiratory syndrome or Sars crisis.

Economists are bracing themselves for bleaker numbers ahead.

CIMB Private Banking economist Song Seng Wun said: "We had not expected the pandemic and its severe impact. Businesses were caught very much out of the blue, especially those in the direct line of impact like travel and leisure. Some food and beverage firms have already shuttered, with others announcing that they are closing, so this is where the impact on the labour market will be felt."

Around 3,220 workers were laid off in the first quarter compared with the 2,670 in the last quarter of 2019.

There were 1,537 local employees affected by their companies shutting down from January to March, compared with 628 in the fourth quarter of last year.

Mrs Teo noted that measures like the Jobs Support Scheme have prevented the unemployment rate or retrenchments from spiking sharply.

"Instead of retrenchments, we saw a fivefold increase in the number of employees who were placed on shorter work weeks or temporary lay-offs... (which) suggests measures that are supported by tripartite partners (are working). Although they involve some sacrifices on the part of the workers, they are also helping to preserve jobs," she said.

Some 4,190 employees were placed on new arrangements that involved working shorter weeks or being temporarily laid off in the first quarter, compared with 840 in the last quarter of 2019.

There was also a fall in the average weekly total paid hours worked per employee, from 44.7 hours last December to 44.4 hours in March this year, with an average of 2.4 hours of paid overtime a week.

Mrs Teo said: "We do not know exactly how the second quarter will turn out but it is best for us to get ready and be prepared for more job losses, and we have to try our very best to open up more pathways for job seekers."

Such pathways include traineeships for fresh graduates and mid-career professionals, to help them boost their resumes even when companies might not be ready to hire them full-time due to the uncertain economic outlook, she added.

Many low-wage workers continue to work and get paid during the circuit breaker period: Manpower Minister Josephine Teo
By Sue-Ann Tan, The Straits Times, 16 Jun 2020

Many lower-paid workers continued to be employed during the circuit breaker period as they were engaged in essential services, said Manpower Minister Josephine Teo.

Her remarks came in response to questions during a briefing ahead of the labour market report released yesterday about how low-wage staff members were coping, given that total employment fell by the sharpest margin ever in the first quarter.

Retrenchments also rose, while increasing numbers of workers are affected by cost-cutting measures such as having shorter working weeks or being temporarily laid off.

Concerns have been raised about the plight of low-wage workers whose financial difficulties would increase tremendously if they are retrenched or placed on no-pay leave.

But Mrs Teo noted that while non-essential businesses had to cease operations during the circuit breaker period, low-wage employees tend to be working in vital roles.

She said: "It would appear that there are quite a lot of (low-wage) workers in essential services so they could continue to work during the circuit breaker period...

"Our intention, not just in the short term but in the medium to long term, is to uplift low-wage workers."

She added that Workfare payouts are available for low-wage Singaporeans who continue working and training, and a special payment of $3,000 was announced in the Budget to provide additional support for such workers aged 35 and above as of last year.

The Manpower Ministry has worked with tripartite partners to issue advisories to companies that employ low-wage workers as well as the service buyers that outsource the work to ensure that these workers are properly taken care of in terms of salary and welfare, said Mrs Teo.

She said that some workers have seen their workload increase because more cleaning needs to be done or they have to carry out more deliveries.

"In these instances, we have reached out to companies to say they should pay the workers what they paid before and, in fact, recognise extra work and make the appropriate adjustments to the payouts."

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