Bloomberg reported yesterday (8 May) that expats in Singapore are beginning to ask for rent cuts from landlords as their salaries are being affected by the current COVID-19 crisis.
“Singapore expats are often envied for their generous pay packets but facing the prospect of salary cuts as the coronavirus batters businesses, some are tightening their belts and asking for lower rent,” Bloomberg reported.
An ERA real estate agent Clarence Foo told Bloomberg that he has come across a number of such cases over the past month.
One was an American woman in her 30s, who texted Foo last week. In her message, she said she had just been informed of a 20% drop in pay effective from May 1 until July 31, after which her employer will reassess the company’s financial health. Despite the pay cut, she at least still gets to keep her job.
The American PMET (professionals, managers, executives and technicians) is leasing a one-bedroom apartment at Tanjong Pagar, near Singapore’s financial district, for S$3,400 a month. The landlord agreed to reduce her rent by $250 a month, or around 7% reduction. “At first glance, it isn’t a lot. But over three months, the duration of her pay cut, it’s a substantial saving (for her),” Foo said.
Another expat living in a condominium at Sentosa Cove was reported to have his rent lowered by 20%.
Singapore to enter deep recession this year
As the COVID-19 pandemic rages, the Monetary Authority of Singapore (MAS) warned last week (28 Apr) that Singapore will enter into a recession this year, resulting in job losses and lower wages, with “significant uncertainty” over how long and intense the downturn will be.
MAS estimated that Singapore’s economic growth could even dip below the forecast range of -4 to -1 per cent to record its worst-ever contraction.
To help companies with foreign employees, levy waivers and rebates have also been provided to the companies by the government. For example, the government provides levy rebates of S$750 for each S Pass holder in employment as at 1 May and a waiver of the April levy as well. This is to enable employers to preserve their manpower in order to quickly resume operation, the government said. S Pass holders are mid-skilled foreign employees who have a degree or diploma.
Meanwhile, data released by the government last month shows that the number of foreign PMETs has slowly crept up. At the end of last year, the number of foreign PMETs (Employment Pass and S Pass holders) hit almost 400K at 393,700. This was the largest increase at 3.3% since the last general election in 2015 (‘Number of foreign PMETs in Singapore hits 400K; largest increase last year since 2015 GE‘).
Not only the foreign PMET number is creeping up, the unemployment rate among Singaporeans is also going up. The overall unemployment rate (seasonally adjusted) in Singapore was 2.4% in the first three months of this year while that of citizens was 3.5%, the highest in the last 10 years.
From fetching passengers to fetching food and groceries
At the same time, many unemployed Singaporeans especially the retrenched PMETs are turning to driving Grab in order to make a living, something HR experts and others have cautioned against. Prof Walter Theseira, a Nominated MP and an economist at the Singapore University of Social Sciences (SUSS), is concerned about large number of PMETs driving Grab or taxi.
“The jobs offer no career path and do not provide workers with significant marketable skills. This means that workers in such jobs will inevitably end up disadvantaged compared to their peers who are able to stay in jobs that offer a career path and the opportunity to build marketable skills,” he said.
That is to say, PMETs who switched to driving Grab or taxi would have an even harder time getting a job in the market later because it would not help to build up their resume.
But with the COVID-19 outbreak, cabbies and private-hire car drivers have been hard hit. Many are turning to delivering food and groceries instead with their vehicle (‘Cabbies, private-hire car drivers turn to food and grocery deliveries‘, 18 Apr).
Grab, the largest private-hire operator in Singapore, said “thousands” of drivers have signed up to offer food delivery services. Many told the media that it is “better than nothing”. They were relieved to have an extra option to help cover costs.
Grab driver Don Ong, 24, said, “I can complete up to 17 deliveries in a day, earning about $120. It’s three to four times more than what we can earn now from the normal ride-hailing jobs.”