SINGAPORE -The jobs market looked like it would go over a cliff when the pandemic struck but a government initiative that has been fine-tuned and tweaked several times over the year has proved a lifeline.
The Jobs Support Scheme (JSS) is a wage subsidy programme that was set up in February to help employers pay a portion of their workers' monthly salary.
The timing was vital given that people had been urged to stay at home as much as possible, with schools, offices and non-essential shops closed during the circuit breaker.
But many businesses were financially battered and the spectre of mass layoffs loomed into view.
The Government responded with the JSS, which initially funded 8 per cent of the monthly wages of every Singaporean or permanent resident employee for up to three months at a cost of $1.3 billion.
The aim was to help workers stay employed by defraying wage costs and in turn stabilise and support the economy.
The scheme has since been enhanced five times in line with the evolving Covid-19 crisis, and is now expected to cost more than $21.5 billion once its winds up next year.
The first and largest enhancement came in March, about a month after it had been introduced as it became clear that the pandemic would lead to a global economic crisis.
Instead of 8 per cent, employers would get between 25 and 75 per cent in wage subsidies for every local employee's monthly pay for up to nine months.
The subsidy would also cover the first $4,600 of gross monthly wages - the median wage here - up from the previous limit of $3,600.
This meant that at least 25 per cent of the monthly wages of 1.9 million local employees would be funded by the Government.
These enhancements meant the JSS would have cost about $15.1 billion in total, more than twice the level of support provided during the global financial crisis in 2009.
Deputy Prime Minister Heng Swee Keat announced the move during the Supplementary Budget, noting: "We cannot prevent an economic recession as the external health and economic situation will evolve beyond our control. But it will help us mitigate the extent of the downturn and more importantly, help save jobs, and protect livelihoods.
"With this support from the Government, I urge employers to do your part to hold on to your workers."
Higher levels of subsidies were reserved for harder hit industries. The food services sector received 50 per cent of support, while the aviation and tourism sectors received 75 per cent.
The JSS was enhanced twice in April.
The first tweak came days after the Government announced that Singapore would enter into a circuit breaker on April 7.
Firms in all sectors would get 75 per cent of subsidies for their local employees for April, capped at the same level of $4,600. The payouts would also be given earlier to help ease any cash flow troubles.
When it was announced later that month that the circuit breaker would be extended by a further four weeks until June 1, the subsidy was extended through May.
The JSS was enhanced again in May to extend the length of support from nine to 10 months of wages. More sectors, particularly those that could not reopen after the end of the circuit breaker, also received higher subsidies.
As the economy started to reopen in August, the JSS was extended by up to seven months until March, a move that would lead to an outlay of around $21.5 billion in total.
But the Government warned that it would not be able to sustain the JSS indefinitely, with the final payouts in June next year likely marking the end of the scheme.
While the JSS can be credited for saving jobs, analysts said that it takes more to save companies in some hard-hit sectors.
OCBC Bank head of treasury research and strategy Selena Ling told The Straits Times: "The JSS has likely helped to head off the worst of the local retrenchments ... but it is still an evolving story.
"If demand conditions don't pick up soon, some firms may still go under and the recalibrated JSS will only buy a bit more time."