Unemployment at highest in a decade, retrenchments up

Total employment in 2nd quarter plunges by 121,800 - the biggest quarterly fall on record

The number of workers here plunged by 121,800 in the second quarter, according to preliminary data released by the Ministry of Manpower. PHOTO: LIANHE ZAOBAO

Unemployment and retrenchments surged between April and June, as the Covid-19 pandemic took a toll on the labour market.

The overall unemployment rate rose to 2.9 per cent last month 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, preliminary data released by the Ministry of Manpower (MOM) yesterday showed.

Still, unemployment remained lower than previous 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 last month, up from 66,900 in March. Together with permanent residents, there were 90,500 unemployed residents last month, up from 76,200 in March.

Total employment, including those on work passes but excluding foreign domestic workers, plunged by 121,800 in the second quarter - the biggest quarterly fall on record. This is more than four times the fall in the first quarter, and means that the economy has shed a net 147,500 workers in the first half of the year.

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 Sars outbreak, but below the 2009 global financial crisis high of 12,760, said MOM.

Layoffs rose significantly in the last quarter in wholesale trade and transport equipment due to lower demand for retail and air travel.

Manpower Minister Josephine Teo said yesterday 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 bottomed out.

"The outlook is still uncertain," she said. "Singapore is very plugged into the global economy. When there's weakness in global demand, companies are likely to be much more cautious."

In services, the second-quarter contraction in employment was sharpest in food and beverage; retail trade; arts, entertainment and recreation; and education. Construction also saw a steep drop in employment, while manufacturing saw a more modest decline.

Mrs Teo noted that the construction, marine and process industries will need more adjustment as they deal with strict requirements for resuming activity on worksites, and said there will be support, as the Government looks into foreign worker levies.

"We know very well that they've carried the heavier burden on behalf of all of us, and we are very mindful that we will try our best to support them throughout this period of transition," she said.

National Trades Union Congress assistant secretary-general Patrick Tay said he was concerned that the figures may not reflect the full picture, as older workers who are not re-employed, or foreigners whose work passes are not renewed, are not included in the overall retrenchment numbers.

Observers expect unemployment to rise in the coming months, as measures like the Jobs Support Scheme taper off.

Yesterday, Deputy Prime Minister Heng Swee Keat also announced that traineeships will be expanded to cater to mid-career job seekers. They can apply for over 13,000 attachments from Saturday.

Mr Heng urged employers to take on workers who may not be the perfect fit but are willing to learn, saying: "When the Covid-19 situation passes... they will be able to emerge stronger."

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A version of this article appeared in the print edition of The Straits Times on July 30, 2020, with the headline Unemployment at highest in a decade, retrenchments up. Subscribe