Singapore's total Covid job losses far outstrip past recessions, despite resident employment recovery

EMPLOYMENT losses in the Covid-19 pandemic have vastly outstripped those in previous recessions, with a massive loss of non-resident workers far outweighing the recovery of resident employment, according to a box article in the Ministry of Trade and Industry's (MTI) latest quarterly Economic Survey of Singapore, released on Wednesday (Nov 24).

By the third quarter of 2021, Singapore's total employment had fallen by 196,400 cumulatively. Of this, 113,500 or more than half of the loss was during Q2 2020 alone, during which "circuit-breaker" measures were in place.

This was several times the peak-to-trough declines during the dotcom bubble (-79,500), Asian financial crisis (-42,100) and global financial crisis (-13,800).

Unlike past downturns, the pandemic hit the economy through 5 different channels simultaneously, said the report. First, the plunge in international visitor arrivals and air travel hit related sectors. Second, domestic Covid-19 curbs and falling consumption hurt consumer-related sectors.

Third, weak external demand and supply chain disruptions dampened the performance of outward-oriented sectors for much of 2020. Fourth, negative spillovers from the overall economic slowdown hurt demand for sectors such as real estate.

Finally, sectors reliant on migrant workers were hit by manpower disruptions from Covid-19 outbreaks in dormitories, and border restrictions.

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As a result, job losses in the Covid-19 crisis were more broad-based than in past recessions, with the greatest losses in services (-86,400), followed by construction (-62,600) and manufacturing (-47,000).

In contrast, services employment growth had remained positive during the global financial crisis, dotcom bust and Asian financial crisis.

As in past downturns, the non-resident workforce buffered resident workers from employment losses.

From Q4 2019 to Q2 2021, non-resident employment fell by 230,400, while resident employment rose by 43,400. Specific employment figures by residency status are not yet available for Q3 2021, but the Manpower Ministry has said that resident employment expanded substantially and non-resident employment contracted in that quarter.

Targeted support measures for residents, such as the Jobs Support Scheme and Jobs Growth Incentive, may have also supported resident employment outcomes in the pandemic, said MTI.

Despite the massive employment losses, Singapore's overall unemployment rate has stayed relatively low. This "partly reflected the availability of employment opportunities, as well as the loss of non-resident workers who exited Singapore's labour force amidst the downturn", said MTI.

The overall seasonally-adjusted unemployment rate peaked at 3.5 per cent in September 2020 and recovered to 2.6 per cent a year later, though this remains above the pre-pandemic level of 2.3 per cent in December 2019.

Resident and citizen unemployment stand at 3.5 per cent and 3.7 per cent respectively, compared to pre-pandemic rates of 3.2 per cent and 3.3 per cent.