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As job numbers turn out worse than early estimates, Josephine Teo warns full effects of Covid-19 yet to be felt

SINGAPORE — The Covid-19 pandemic may have led to a contraction in the labour market for the first quarter of this year, but Manpower Minister Josephine Teo warns that Singapore has yet to feel the “full effects” of the crisis.

As job numbers turn out worse than early estimates, Josephine Teo warns full effects of Covid-19 yet to be felt

The Ministry of Manpower's latest data showed that total employment excluding foreign domestic workers dropped by 25,600 — 29 per cent more than the 19,900 indicated in its preliminary report.

SINGAPORE — The latest numbers on the labour market situation in Singapore show that the situation in the first quarter was worse than the preliminary findings predicted in April, and Manpower Minister Josephine Teo warned that they are likely to get worse, as the Republic has yet to feel the “full effects” of the Covid-19 crisis.

Speaking to the media last Friday (June 12) ahead of Monday’s release of the labour market report for the first quarter of this year, Mrs Teo harked back to what the first three months of the year were like.

A majority of the travel restrictions that are in place today had yet to start in February, she said, and the circuit breaker to restrict movement and activities was imposed only on April 7 to curb the spread of the coronavirus.

“In other words, the full effects of Covid-19 will certainly not have been felt in the first quarter of 2020,” she said.

Even so, the final report on the labour market situation here already shows that the situation in the first quarter was worse than inititally estimated, she added.

For example, the contraction in total employment was “sharper” than what the preliminary findings suggested.

Total employment, excluding foreign domestic workers, dropped by 25,600 — 29 per cent more than the 19,900 indicated in the preliminary report.

Furthermore, employment among residents had started to contract slightly in the first quarter, contrary to the preliminary findings that suggested it had grown at a “modest pace”.

Mrs Teo said that by March, the ratio of job vacancies to unemployed persons had fallen to a decade low of 0.71. As a comparison, this ratio was closer to 1.0 for the whole of 2019.

“That shows you how three months have changed the picture for job vacancies.”

A new indicator introduced in the report was the employment diffusion index, which measures the breadth of how widespread employment change is across industries on a scale of zero to 100.

The index was 38.7 in March this year, down from 55.7 in December last year and 60.1 in March last year.

The Ministry of Manpower (MOM) said this suggests that employment declines in the first quarter of this year were “fairly widespread” across sectors.  

An index that is above 50 means that there are more industries with increasing employment than industries with decreasing employment. The reverse is true for an index below 50.

MOM added that the further away the index is from the midpoint, the more widespread employment changes across sectors.


Despite the bleak outlook, Mrs Teo said that there are “still some silver linings” in the labour report for the first quarter.

For one, it appears that the Government's job and wage support schemes are “providing some cover”, she noted.

The report showed that 3,220 people were retrenched in the first quarter of this year, compared with 2,670 in the last quarter of 2019. Year on year, the number of people retrenched in the first quarter of 2019 was 3,230.

MOM said that when compared with the fourth quarter of last year, retrenchments have come up and it is largely because of sector downturn or poor business.

But it is significantly lower than the peak of 12,760 seen in 2009, the year Singapore felt the effects of the global financial crisis. 

Referring to the latest figures, MOM said that sometimes, firms — especially the smaller ones — are likely to close down completely, rather than retrench workers or downsize.

An estimated 1,537 resident employees were affected by businesses that stopped operations in the first quarter of this year. 

MOM said that this is very much higher than the number of employees affected in the previous quarter (628) and the same period a year ago (978).


Separately, for workers who were not retrenched, 4,190 were placed on a shorter work week or temporarily laid off for the first quarter of this year.

This was a five-fold increase compared with the 840 employees who were placed on similar arrangements in the last quarter.

“This is actually very interesting,” Mrs Teo said. “It suggests that the measures that are supported by the tripartite partners, although they do involve some sacrifices, especially on the part of the workers, are also helping to preserve jobs.”

On March 30, the National Wages Council issued guidelines on how employers should cut wages responsibly, if they really must, in order to keep workers employed. 

A separate advisory was issued later that day, setting out the terms that allow employees to take on more than one job to supplement their income during periods when there is no work.  

Mrs Teo highlighted that while overall job vacancies came down, some sectors saw more job vacancies open up. These included those in electronic manufacturing, information and communication, health and social services.


Mrs Teo said that MOM is uncertain about how the second quarter will turn out. 

“It's best for us to get ready and be prepared for more job losses,” she said. “We have to try our very best to open up more pathways for the jobseekers."

Some initiatives to support this include traineeships for fresh graduates.

As for mid-career professionals, she said “pathway programmes” could enable them to acquire relevant work experience in companies that are building up their capabilities in industries that are “positioned for growth” in the future.

At a time when companies are hesitant to hire, such programmes will help reduce hiring risks by ensuring that potential candidates have the skills needed for the job, she added.

“Although the outlook is very uncertain (and) we want to brace ourselves for difficult times ahead, there are opportunities that we can expand on that can help active jobseekers.”

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