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Resident incomes fell in June, but employment levels bounce back
THE income of Singaporeans and permanent residents in June fell for the first time in 16 years, but resident employment levels have since bounced back to pre-Covid levels, the Ministry of Manpower (MOM) has said.
Its findings on the impact of the pandemic in its annual Labour Force Singapore Advance Release 2020 report, issued on Thursday, show that the nominal median income for residents (Singaporeans and permanent residents) dipped 0.6 per cent over the year to S$4,534 at the height of the circuit breaker in June.
The report, based on the mid-yearComprehensive Labour Force Survey, covers only the resident workforce between June 2019 to June 2020.
After accounting for inflation, real median income slipped 0.3 per cent, reversing the 2.2 per cent rise in 2019. MOM said: "Despite the moderation in 2020, real median income growth over the recent five years (2015 to 2020: 2.7 per cent per annum) remained close to that over the preceding five years (2010 to 2015: 3.1 per cent per annum)."
The data is for full-time employment and includes employer Central Provident Fund contributions. (see amendment note)
The real income of full-time workers in the bottom 20 per cent fell by a steeper 4.5 per cent year on year to S$2,340 in June. This comes from there being more low-income earners in industries hit harder by Covid-19.
When government payouts such as Workfare Income Supplement and Workfare Special Payment for lower income earners are added, the 20th percentile income level in 2020 is similar to that in 2019, said the report.
DBS Bank's senior economist Irvin Seah said MOM's finding about the income drop was no surprise, and that DBS' own study backed this up: It found that 26 per cent of the bank's 1.2 million account holders with salary credits suffered a 20 per cent drop in their income in May, compared to the average of the two lower months between December 2019 and February 2020.
He said this reflects the impact of the Covid-19 pandemic, which hit the low-income group the hardest; the government's support schemes have hit their targets, and will still be needed, but on a more targeted basis.
Mr Seah said that while the recovery in employment would help lift income levels, the jobless number remains sizable.
The report noted that the employment rate remained high at 80.3 per cent for residents aged 25 to 64, the bulk of whom are in their prime working age. This was near the average in the last five years (80.5 per cent).
Manpower Minister Josephine Teo said at a Zoom media conference that employment rate can stay high even amid a rising unemployment rate, because more people join the workforce than leave it - with more graduates, women and seniors looking for jobs.
The overall unemployment rate remained steady in October, while that for residents inched up by 0.1 per cent from September.
The employment rate for women largely held up, while that for men eased by 0.9 percentage point. The employment rate for seniors aged 65 and up continued to improve, rising from 27.6 per cent in June 2019 to 28.5 per cent in June 2020; MOM put this down to the ongoing efforts to raise their employability.
But the employment rate for youth aged 15-24 continued to fall, due to their staying longer in school. And then while studying, many took up vulnerable part-time jobs in the harder-hit hospitality sectors. MOM said: "The two effects, combined, caused the employment rate decline of 3.0 percentage points for this age group to be the sharpest among all age groups."
Because industries hit hard by Covid-19 have more non professionals, managers, executives and technicians (PMETs), the resident unemployment rate for non-PMETs rose more than that for PMETs - a 1.7 percentage point jump from June 2019 to June 2020 for non-PMETs, against a 0.6 percentage point rise among PMETs in the same period.
Selena Ling of OCBC Bank said: "The labour market situation appears to be stabilising a bit, or at least the deterioration is slowing down slightly. Given the long tail nature of the pandemic and the K-shaped recovery, unprecedented policy measures may have flattened the unemployment surge, but it may take longer to normalise. It is likely that unemployment rates may continue to creep a bit higher in coming months and quarters, but the impending vaccine prospects should hopefully cap the deterioration."
Amendment note: An earlier version of this article incorrectly stated that the data excludes employer Central Provident Fund contributions. It is in fact included, and the article above has been revised to reflect this.