The View From Asia

Covid-19 and Asia's jobs crisis

Asia News Network commentators discuss the effects of the Covid-19 pandemic on soaring unemployment in Asia. Here are excerpts.

People visit an office of the labour ministry in Seoul to apply for unemployment benefits, on April 13, 2020. PHOTO: EPA-EFE

Virus-driven job losses


The Korea Herald, South Korea

Recent data on the labour market for last month raises concerns about massive job losses driven by the coronavirus pandemic.

Before the Covid-19 outbreak, the South Korean employment situation was going downhill under President Moon Jae-in's administration.

As many as 215,000 midlife career jobs for those in their 30s and 40s, the backbone of the South Korean economy, vanished last year alone. It was a terrible consequence of the government's income-led growth policy.

In a situation where the labour market's ability to create competitive jobs was weakened, it suffered a severe blow from the coronavirus crisis.

Unemployment benefit payments hit an all-time high of 898.2 billion won (S$1 billion) last month, eclipsing the previous high of 781.9 billion won in February.

The number of first-time claimants for unemployment cheques reached 156,000 last month. That is as good as a large company with 5,000 employees closing each day.

The figure is up 31,000 from a year earlier. Most of the new applicants lost jobs in the hospitality industry, including lodging, food and beverage services and travel.

Recipients of unemployment benefits totalled 608,000 last month, the largest figure since unemployment insurance in South Korea began in 1995.

Considering social welfare costs incurred by unemployment, it is economical to spend money preventing job losses. The best policy to decrease unemployment is to help firms keep people employed.

The point is how. The problem cannot be solved only by hiring subsidies. Fiscal assistance has its limits, but what is important is to keep up employment in industries.

The government must try to foster conditions for both labour and management to share the burden for the survival of companies.

Fiscal support for employment is needed, but it is no more than a quick fix. The government must turn its eyes from workers to companies.

It must try to reinvigorate them with market-friendly policies, while lessening the labour market rigidity that worsens the employment situation.

Create jobs for college graduates

Wang Yiqing

China Daily, China

The coronavirus outbreak poses a great challenge for college graduates seeking jobs this year, more so because the total number of college students likely to graduate this year is a historic high of 8.74 million.

Employment for college graduates is of great importance in all countries because they are the future of society.

Two kinds of measures by the government could ease the pressure on college graduates: providing them support and/or formulating policies that encourage enterprises to survive and hire more graduates.

The State Council, China's Cabinet, realises the problem and is exploring the possibility of creating more job opportunities or encouraging graduates to start their own businesses.

The government is also extending support to unemployed graduates from impoverished families and those from colleges in Hubei, which was worst hit by the outbreak.

The government should also help enterprises that are facing difficulties. Small and medium-sized enterprises account for 70 per cent of all Chinese enterprises and hire the maximum number of graduates.

But they have suffered immensely from the outbreak and are not in a position to hire college graduates who lack experience.

The survival of such enterprises is key to graduate employment.

Workers need protection


The Jakarta Post, Indonesia

The government's new pre-employment card programme comes as millions of workers are losing their jobs as the Covid-19 pandemic paralyses businesses.

What was supposed to be President Joko Widodo's campaign pledge to distribute training subsidies to develop workers' skills has now turned into a social safety net with unemployment benefits.

Around four million people applied after the April 11 launch of the programme, which offers a 3.55 million rupiah (S$320) subsidy per recipient for four months.

While this indicates the successful outreach of the programme, the bitter reality is that people are losing their jobs and are in dire need of a social safety net.

Indonesia's 133 million workforce, seven million of whom were unemployed as of last August, cries for a wide-ranging social safety net during this difficult time.

The government is estimating 2.9 million to 5.2 million more workers could lose their jobs during the Covid-19 pandemic.

Tourism-related businesses from airlines to hotels to restaurants have stopped or limited operations, while factory activity contracted to its deepest level in history last month, according to the Bank Indonesia Prompt Manufacturing Index. Over 70 million informal workers, who account for more than half of Indonesian labour, are at the greatest risk as they rely on weekly, if not daily, pay with no safety net.

The 2.4 million rupiah incentive and 150,000 rupiah overall bonus for participating in training surveys would ease the burden to make ends meet for the 5.6 million pre-employment card recipients planned for this year. However, the one million rupiah in training funds a person needs to be used properly.

The designated funds are part of a total pre-employment card budget of 20 trillion rupiah and would be funnelled into training institutions registered under eight digital platforms.

These funds should be continuously reviewed to uphold the integrity of the receiving training institutions and digital platforms, as well as to maximise the effectiveness of the training programmes.

Training programmes would be beneficial only under the assumption that there are employers to recruit.

Otherwise, cash transfers and staple food aid are much more important for the most vulnerable as they cope with the financial shocks associated with Covid-19.

Strain on daily-wage workers

Zulfiqar Shah

Dawn, Pakistan

While lockdowns are being presented globally as an effective tool to curtail the Covid-19 spread, the actual challenge is to reduce the socio-economic impact of the exercise. It is proving to be a strain on the labour force in the country, and particularly in Karachi, where millions depend on daily wages.

Out of 65.5 million workers in Pakistan, approximately 72 per cent are in the informal sector, which means there is no monthly pay cheque to fall back on if they do not show up for work.

Sindh alone has a 15.19 million-strong labour force. If one excludes agriculture, which employs 38 per cent of the total workforce, the remaining 9.41 million workers are largely employed in Karachi, which has been badly hit by the lockdown.

Over 6.5 million are informal labour who are not paid if they do not work on a day-to-day basis.

However, the Sindh government, at least on paper, has declared that all kinds of workers in the province must be paid wages during the lockdown period. Regardless of the good intentions behind such orders, it is unlikely that the workers will be paid while they are away, unless the provincial government comes up with a practical mechanism to ensure implementation of its directives and addresses legal loopholes.

• The View From Asia is a compilation of articles from The Straits Times' media partner Asia News Network, a grouping of 24 news media titles.

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A version of this article appeared in the print edition of The Sunday Times on April 19, 2020, with the headline Covid-19 and Asia's jobs crisis. Subscribe