Unemployment and retrenchments in Singapore surged between April and June, while total employment saw the biggest quarterly fall on record, as the Covid-19 pandemic took a toll on the labour market. The overall unemployment rate rose to 2.9 per cent in June after taking into account seasonal variations – the highest in just over a decade, and up from 2.4 per cent in March. The rate for Singaporeans rose to 4 per cent, from 3.5 per cent, and the rate for Singaporeans and permanent residents combined rose to 3.9 per cent, from 3.3 per cent, according to preliminary data released by the Ministry of Manpower (MOM).
Still, unemployment remained lower than previous recessionary peaks during the global financial crisis and the Sars outbreak, said the ministry. The number of unemployed Singaporeans climbed nearly 20 per cent to 79,600 in June, up from 66,900 in March. Together with permanent residents, there were a total of 90,500 unemployed residents in June, up from 76,200 in March. Total employment, excluding foreign domestic workers, plunged by 121,800 in the second quarter.
Retrenchments more than doubled in the second quarter, with 6,700 workers laid off, up from 3,220 in the first quarter. This was higher than the peak of 5,510 during the 2003 severe acute respiratory syndrome (Sars) outbreak, but lower than the 2009 global financial crisis high of 12,760, said the ministry. Layoffs rose significantly last quarter in wholesale trade and transport equipment due to lower demand for retail and air travel, MOM said.
Manpower Minister Josephine Teo told a media conference that the contraction in employment was “quite reflective of the workforce composition” in terms of the spread between local and foreign workers, but added that the exact breakdown is not yet available. She also noted that the jobs situation may not have hit rock bottom yet: “I think it is reasonable for us to adopt a more cautious attitude, and that is to expect that it hasn’t bottomed out. Of course, it all depends on the sentiments amongst the companies in the economy. Some are resuming activities. But even as they resume activities, they may ask the existing staff to perform more responsibilities, rather than to proceed with hiring.” She added that even for food and beverage establishments that might see consumer demand return, their crowd volumes cannot return to pre-pandemic levels due to safe measures, which will in turn impact hiring. “The outlook is still uncertain, and not only within Singapore. Singapore is very plugged into the global economy. When there’s weakness in global demand, companies are likely to be much more cautious,” she said.
National Trades Union Congress assistant secretary-general Patrick Tay expects retrenchments and unemployment to worsen further over the rest of the year, due to continued travel restrictions, safe management measures as well as an overall uncertain outlook across many industries. Besides small- and medium-sized enterprises, large local enterprises and multinational companies are also impacted with delayed or reduced investments, curtailed production, and freezes in global headcount, he said. “I am particularly concerned that the figures may not reflect the full impact of [job losses] as I do see and hear of workers being contractually terminated (though with adequate notice pay), older workers not being re-employed, as well as foreign workers on work permit, S Pass and Employment Pass whose passes are not renewed. These do not count towards overall retrenchment numbers.”