Bottom 20% income earners hit hardest by Covid-19 circuit breaker, but govt payouts mitigated impact: MOM report

• Income at the 20th percentile of full-time employed residents fell from S$2,457 to S$2,340 year-on-year in June
• Real median income growth fell to -0.3 per cent, compared to 2.2 per cent last year
• The employment rate of those aged between 15 and 24 dropped from 33.9 per cent to 30.9 per cent, partly due to young people choosing to study longer
• Employment rate for residents aged 25 and 64, however, “remained high” at 80.3 per cent

SINGAPORE — Blue-collar workers and low-income individuals were the hardest hit by the Covid-19 circuit breaker, with the income for those at the 20th percentile falling 4.5 per cent in June compared with the same period last year. 

In contrast, there was a marginal decline (0.3 per cent) in median wages, based on the Ministry of Manpower’s (MOM) Labour Force in Singapore Advance Release 2020 report, which was released on Thursday (Dec 3).

Nevertheless, the report added that overall incomes among the bottom 20th percentile was not worse than last year, after taking into account the government payouts they received. 

In June, the income at the 20th percentile of full-time employed residents, including their employers’ Central Provident Fund contributions — was S$2,340, down from S$2,457 in the same month last year. This was a “steep decline”, as MOM put it.

This year’s figure goes up to S$2,449, when the Workfare Income Supplement, as well as a one-off Workfare Special Payment of S$3,000, were taken into account. 

In its report, MOM noted that industries more adversely affected by Covid-19 have a high concentration of lower-income earners.

Many of them are also self-employed workers such as taxi or private-hire car drivers and hawkers whose incomes were impacted by the plunge in tourist arrivals, work-from-home arrangements, and temporary suspension of dine-in services at food and beverage outlets during the circuit breaker period, it said. 

MOM’s findings were based on data obtained from its mid-year Comprehensive Labour Force Survey, which coincided with the country’s lockdown from April 7 to June 1 when there were curbs on business activities and movement.

MOM would only reveal the impact of the circuit breaker on the wages of those in the bottom 20th percentile and those at the 50th percentile, and did not provide figures on how other income groups were affected.

INCOME TRENDS

Overall, wages were slightly depressed, with real median income growth at -0.3 per cent, compared to last year’s 2.2 per cent. 

MOM, however, said that real median income growth over the long term, or last five years, remained close to the preceding five years, which took in the aftermath of the global financial crisis in 2007.

The growth between 2015 and 2020 is estimated at 2.7 per cent per annum, while the growth between 2010 and 2015 was at 3.1 per cent per annum.

Over the five years from 2015 to 2020, the real income growth at the 20th percentile — estimated to be 2.9 per cent per annum — remained slightly higher than the median of 2.7 per cent. 

OVERALL EMPLOYMENT

The report also highlighted that a rise in senior employment was met with a decline in youth employment this year, which resulted in a fall in the employment rate for residents aged 15 and over from 65.2 per cent last year to 64.5 per cent — the lowest rate since 2014. 

The report also found that the drop in the employment rate of youths, referring to those aged between 15 and 24, from 33.9 per cent to 30.9 per cent was partly due to young people choosing to study longer. 

Employment rate of residents in their prime working age — those aged 25 to 64 — “remained high” at 80.3 per cent, close to the average of 80.5 per cent in the last five years, despite the impact of Covid-19 on the economy, MOM said.

Among this group, the employment rate for males fell from 88.8 per cent to 87.9 per cent while that for females dipped from 73.3 per cent to 73.2 per cent. 

Meanwhile, the employment rate for residents aged 65 and over rose by 0.9 percentage points to 28.5 per cent. 

MOM attributed this to the ongoing efforts to raise the employability of senior workers, including a scheme in 2011 which gives companies subsidies for employing such workers. 

UNEMPLOYMENT RATES OF NON-PMETS, PMETS

Non-professionals, managers, executives and technicians (PMETs) saw their unemployment rate increase more than PMETs.

The resident unemployment rate for non-PMETs rose from 4.7 per cent to 6.4 per cent, while the corresponding rate for PMETs increased from 2.9 per cent to 3.5 per cent.

MOM said that both rates are below the peaks in previous recessions. 

Among non-PMETs, unemployment rates rose steeply across all age groups, while the increase for PMETs was comparatively smaller, except for older PMETs aged 50 and over.

PMETs in their 40s experienced a larger increase in long-term unemployment rate compared to other age groups. 

Among non-PMETs, long-term unemployment rate rose for residents aged below 30 and in their 40s but held steady for residents aged 50 and over.

MOM said the increase in unemployment rates for both PMETs and non-PMETs were driven by shorter-term unemployment periods, as the increase in their long-term unemployment rates was considerably smaller at 0.1 percentage points for non-PMETs and 0.2 percentage points for PMETs.

It added that it is monitoring the long-term unemployment rates closely.