In the first quarter of 2020, the total employment had been reported to register its sharpest drop since the SARS outbreak in 2003.
According to a press statement released by the Ministry of Manpower (MOM) today (29 April), the contraction of 19,000 was due to a “significant reduction in foreign employment”.
It stated that the unemployment rates rose in March but it was still lower than the peak reduction observed back in 2003 when SARS occurred.
As reported on T and F Online, the Ministry of Manpower (MOM) of Singapore revealed that the overall employment plunged by 25,963 in the second quarter of 2003. It was not only higher than the total number of jobs lost in 2002, but also the largest quarterly decline since the mid-1980s recession.
The overall unemployment rate increased from 2.3 per cent to 2.4 per cent. As we focus on the unemployment rate for residents, it was increased from 3.2 per cent to 3.3 per cent, while citizens are experiencing an increase from 3.3 per cent to 3.5 per cent.
For 2020, the unemployment contractions were observed across Manufacturing, Construction and Services. The Services sector reportedly has the sharpest decline due to how the COVID-19 pandemic impacted the food and beverage services, retail trade as well as tourism-dependent accommodation.
Although there was a huge plunge of employment in Singapore, the statement had also mentioned that local employment “managed to grow at a modest pace”.
The contractions in wholesale and retail trade, food and beverage services and accommodation were said to offset by the increases in healthcare, public administration and professional services.
However, workers who remain in employment may have experienced reductions in working hours as well as adjustments in their salaries.
A spike in retrenchment
Since the safe distancing measures and Circuit Breaker were implemented, Services observed an increase in retrenchment. The retrenchments were seen mostly in consumer-facing retail trade, as well as food and beverage services since most people had to stay at home amid Circuit Breaker.
Apart from these services, Tourism-dependent accommodation had also observed more retrenchments due to a drop in visitor arrivals.
In the statement, it was mentioned that the 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”.
As reported on CNA, Manpower Minister Josephine Teo stated that much of the contraction occurred after Chinese New Year, which was the second half of the first quarter. This began when travel restrictions were imposed.
The statement by MOM explained that the COVID-19 pandemic had “severely disrupted” economic activity. Comparing Singapore to other countries, MOM said that the rise of unemployment rates in Singapore was due to a fall in foreign employment.
They added that unemployment rates and retrenchment “remain lower” than in previous downturns.
“Globally, COVID-19 and protection measures to contain the pandemic have severely disrupted economic activity. Similar to the experience of many countries, Singapore’s total employment contracted significantly on the account of a fall in foreign employment, and unemployment rates rose. For now, unemployment rates and retrenchments remain lower than in previous downturns,” stated by MOM.