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The worst is not yet over for Singapore’s job market, experts said yesterday in response to the latest data on it for the second quarter of the year.
They pointed to declining wage subsidies, lack of demand and prolonged uncertainties as reasons to expect layoffs to continue and unemployment to rise further for the rest of this year.
The seasonally adjusted unemployment rate, which includes foreigners, rose to 3 percent in July, while the rate for residents, Singaporean and permanent residents, rose to 4.1 percent, the Ministry of Hand said yesterday. Work.
OCBC Bank Head of Treasury Research and Strategy Selena Ling expects the headline rate to rise to 3.5% in the second half of the year, while Maybank Senior Economist Kim Eng Chua Hak Bin expects it to reach a peak slightly above 4%.
DBS Bank senior economist Irvin Seah expects the headline rate to rise to 3.6 percent, and the resident rate to reach 4.2 percent.
Ms. Ling said that some companies are beginning to take the bullet and acknowledge that certain industries such as aviation and hospitality will take months, if not years, to recover.
“The number of workers with a short work week or temporary layoff may fall in the coming months or quarters, but it is likely due to a combination of other sectors returning to more normalized activity levels combined with some companies making the difficult decision of laying off rather than keeping workers in cold storage for a much longer period, “he said.
The deputy general secretary of the National Trade Union Congress, Patrick Tay, said in a Facebook post that the impact of the layoffs may not yet be fully seen, as the reported layoff figures do not include older workers who do not foreigners whose work passes were not renewed were reemployed. and workers who may have left their jobs as employers face imminent liquidation or insolvency.
The figure has already reached 8,130 in the second quarter, the highest level since the 2009 global financial crisis.
So far, lower-skilled workers have been disproportionately affected by layoffs among locals, but DBS’s Seah hopes the impact will spread to professionals as larger companies have to decide whether to restructure their businesses. .
He added that the financial sector, which has so far been largely protected from the impact of the crisis, will be affected if the recessionary cycle is prolonged, especially when the corporate loan moratorium expires sometime next year and if loans and Unprofitable property loan defaults begin to rebound.
Chua of Maybank Kim Eng said the large number of workers with a shorter work week and temporary layoffs (81,720) is concerning and suggests that the layoffs will likely continue to reduce wage subsidies.
“Companies that postpone layoffs may have to face the reality of a prolonged drop in demand and properly size their workforce needs. This will likely include the sectors most affected, including the travel, hospitality, retail and recreation sectors. “, said.
The experts agreed that broad-based government measures that support employment cannot continue indefinitely and the focus will have to change.
Ms Ling said the focus going forward may be more on training and transitioning workers from government-funded opportunities or jobs offered by public sector agencies, to long-term job openings from private sector employers, to avoid structural unemployment problems in the future.
The executive director of the Singapore Business Federation, Ho Meng Kit, said that what is needed is a better scope of the business support schemes so that they understand and make use of them.
He added that both companies and workers must adapt.
“Companies, for example, have to redesign jobs to fit the current job profile and help workers improve during this period to acquire new skills. Workers must be agile and willing to adapt and assume functions in the sectors to remain relevant and competitive. “he said.
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