Singapore Employment Crisis... Direct Blow to Foreigners

Employment Decline in Q1-Q3 Accounts for 90%
Youth and Non-Technical Workers Hit Hard
Concerns Over Rising Unemployment After Support Ends

[Asia Economy Singapore Correspondent Seo Jumi] As the novel coronavirus disease (COVID-19) crisis prolongs, Singapore's labor market is also deteriorating. In particular, the unemployment rate among foreigners, who make up a large portion of Singapore's workforce, has significantly increased.

According to the Ministry of Manpower (MOM) of Singapore on the 29th, 90% of the overall employment decline in Singapore from the first to third quarter of this year was among foreigners. The total foreign labor population decreased by 158,700 (excluding foreign domestic workers). Employment declines were especially notable in the construction and manufacturing sectors, while employment rates in information and communications, healthcare, social services, and education sectors showed slight increases. In the food and beverage industry, employment rebounded and turned upward as strict lockdown measures were eased. The Singapore Ministry of Manpower recently conveyed these details through the '2020 Singapore Workforce Advance Release Report.'

Specifically, foreign employment decreased by 29,100 in the third quarter, a slowdown compared to 103,800 in the second quarter, but layoffs continued to rise from 8,130 to 9,120. Layoffs increased in the manufacturing and service sectors, particularly in air transport, arts, entertainment, and recreation.

On the other hand, employment of Singapore citizens and permanent residents in September rose by 43,200 from 2.29 million in June to 2.34 million. Considering that domestic employment was 2.36 million in December last year before the COVID-19 crisis, this indicates a recovery to pre-COVID-19 levels.

By occupation, professional, managerial, executive, and technical (PMET) workers were less affected compared to non-PMET workers. Unemployment rates for technical and non-technical workers were 3.5% and 6.4%, respectively, showing somewhat less impact on technical workers. However, the unemployment rate for relatively older executives and managers aged 50 and above increased significantly from 3.2% in June 2019 to 4.3% this year.

By industry, demand for delivery, e-commerce, and security services increased, but employment conditions worsened as short-term and contract employment rose rather than formal hiring, reflecting a tendency for employment conditions to deteriorate as the economy worsens. By age, youth workers aged 15 to 24 were the most affected by the COVID-19 crisis. Male employment rates dropped from 88.8% to 87.9%, the lowest since 2004, while female employment rates slightly decreased from 73.3% to 73.2%.

The Monetary Authority of Singapore (MAS) stated that Singapore's economic recovery from this COVID-19 crisis will take longer than during previous economic crises. It forecasted that travel-related industries and some domestic sectors with high interpersonal contact will not recover to pre-COVID-19 levels until the end of next year.

Regarding employment, MAS also expressed the view that resident unemployment rates will remain high and wage growth will stay low. During the 2008 global financial crisis, it took six quarters for Singapore's unemployment and wage growth rates to recover to pre-crisis levels, but recovery from the current COVID-19 crisis is expected to take longer. One reason cited is the decline in corporate profits and household incomes.

Meanwhile, as Singapore recently recorded 'zero' local COVID-19 infections for consecutive days, the government eased alert levels on the 28th, showing signs of gradual recovery in the economy and labor market. However, concerns remain that unemployment may surge sharply after the end of various government employment support schemes that have continued since the strict lockdown.

This content was produced with the assistance of AI translation services.