COVID-19 has hit employment in Singapore even more severely than SARS did, according to figures released by the Ministry of Manpower on June 15. During the first quarter of the year, total employment fell by 25,600, more than 20 percent above initial estimates. This is the largest quarterly contraction the city-state has ever experienced.
Most of the fall in employment is attributed to a reduction in the number of foreign workers, many of whom would have returned home when the outbreak began to spread across Southeast Asia and borders were closed. But local employment tumbled as well as COVID-19 hit the travel and tourism industries harder than expected, even as retrenchments went up and the number of job vacancies declined.
The ministry also released the employment diffusion index for the quarter, which indicated that more industries had reduced their headcount than increased it. A diffusion index increases or decreases from 50, at which point the number of industries that added jobs is equal to the number that reduced jobs. When the indicator goes above 50, it means more industries added jobs; below 50, more industries lost jobs. The indicator stood at 38.7 at the end of March.
The numbers are likely to worsen further, according to Minister for Manpower Josephine Teo, who pointed out that COVID-19's real impact had not kicked in until the end of February. "The full effects certainly have not been felt in the first quarter," she warned. "It is best for us to be prepared for more job losses, and we have to try our very best to open up more pathways for job-seekers."
To date, the Singapore government has dedicated S$92.9 billion (US$65.6 billion), or nearly 20 percent of its annual GDP, to preventing job losses and business closures. The measures it has rolled out include co-funding of salaries and even wage increases and the creation of thousands of additional jobs and trainee placements to keep people employed.