Fleshing out the facts on Singapore’s labour market during Covid-19

By Liang Lei, Gwen Lee and Daryl Choo

PHOTO: LIANG LEI

Manpower Minister Josephine Teo, in her 50-minute address to Parliament on Monday (May 4), gave a rundown on the labour market, workplace safety and foreign worker housing amid the Covid-19 pandemic. Her speech, in full, can be found here.

We zoom in on the segment of her speech that was focused on the labour force and provide some elaboration to points she raised on employment, support for low-wage workers and up-skilling programmes.

Minister said:

“Last week, I updated the public on the labour market situation. COVID-19 hit us mainly from February onwards. In January, the economy was humming along. The Circuit Breaker started only in April. Therefore, in the first quarter of the year, the full impact of COVID-19 was not yet felt.”

Elaboration:

The update last week was the release of preliminary data on the labour market for the first quarter of the year, which ended on March 31.

Minister said:

“Even then, total employment contracted sharply. But the impact was not even; foreign employment fell significantly while local employment still managed some growth. Retrenchments have risen moderately.”

Elaboration:

For the quarter, total employment excluding foreign domestic workers fell by 19,900, the worst contraction since the Sars outbreak of 2003. This was mainly due to a significant reduction in foreign employment.

Retrenchments had also increased to 3,000, up 12 per cent from the previous quarter.

Mrs Teo said then that the statistics may not “reflect the full picture” and that the actual number of retrenchments might be higher.

The number is also significantly lower than the 12,760 in the first quarter of 2009, during the global financial crisis.

Minister said:

“There are signs that employers are trying hard to cut costs to save jobs. They too want businesses to restart quickly when conditions allow. They are being helped by the significant wage support through the Unity, Resilience and Solidarity Budgets, as well as the tripartite consensus on managing excess manpower.”

Elaboration:

Companies are implementing cost-cutting measures as the coronavirus pandemic takes a toll on their business.

Some, like BreadTalk Group and Genting Singapore have cut the pay of their senior and middle management by up to 50 per cent. Others have adapted, like food and beverage firm Sunpark Singapore, which runs brands such as Tonkotsu Kazan Ramen and Belle-Ville pancake cafe, which taught servers to cook and enlisted them to do deliveries rather than lay them off.

The Ministry of Manpower (MOM) said on April 30 that about 3,000 companies — with about 100,000 employees, or 3 per cent of the workforce — have notified MOM that they were taking cost-cutting measures.

Companies with at least 10 employees that intend to cut salaries by 25 per cent or more during the circuit breaker period must inform the Manpower Ministry.

A total of 23 per cent of firms polled by MOM from April 13 to 17 said they would or might reduce their headcount over the next two months, up from 16 per cent of those polled from March 23 to 27. Over the same period, the proportion that said they would or might reduce salaries also rose — to 29 per cent from 15 per cent.

A survey conducted in March by human resources consultancy Mercer Singapore showed 3 per cent of firms here having cut workers' salaries and another 5 per cent were mulling this option. Eleven per cent of those surveyed have, meanwhile, reduced salary increment budgets, with another 22 per cent planning to do so.

Minister said:

“In April, over $7 billion were paid out to employers through the Jobs Support Scheme (JSS). This will help co-fund wages of over 1.9 million local employees. Later this month, more than 4 billion dollars will be paid out additionally.”

Elaboration:

More than 140,000 employers have received the first tranche of payouts worth $7 billion under the Jobs Support Scheme. The $4 billion to be given out for the month of May falls under the additional month of wage co-funding of 75 per cent for all sectors, announced by the Government on April 21 when it extended the circuit breaker measures by another four weeks. Firms will still get two more tranches of payouts under the original scheme in July and October.

Minister said:

“The government provided levy waivers and rebates to help employers meet their obligations to their foreign employees during the Circuit Breaker. By May, over 62,000 employers would have received rebates totalling 675 million dollars. Another 675 million dollars is expected to be paid out by July.”

Elaboration:

Employers with foreign workers had received a levy rebate of $750 for each work permit or S Pass holder, as announced in the Solidarity budget.

Foreign worker levies were also waived for payments due in April. An additional waiver for the month of May was announced by the Government when the circuit breaker was extended to June 1.

Minister said:

“Besides support for their employers, we are providing more direct support for our lower-wage workers. Many of them are in essential services and are continuing to work. They will get enhanced Workfare payouts which took effect in January, of up to 4,000 dollars annually. In addition, 400,000 workers will get extra 3,000 dollars each in cash support through the Workfare Special Payment. This will be in two tranches, in July and October. Total Workfare payouts this year will be about 2.2 billion dollars.”

Elaboration:

About 350,000 people work in essential services after the number of services considered essential was cut on April 22, according to a tally by The Straits Times. That number represents 15 per cent of the local workforce.

The Workfare Income Supplement scheme provides cash and CPF top ups each month to Singaporeans above the age of 35 who earn less than $2,300 a month.

All Singaporean workers who received these payments in 2019 will get an additional $3,000 Workfare Special Payment, as announced in the Resilience Budget, paid over two equal payments of $1,500 each, in July and October.

This is an enhancement of the previously announced one-off special cash payment amounting to 20 per cent of their payout last year, with a minimum payout of $100.

The Workfare Special Payments will be paid out in cash, while the regular monthly payouts for eligible Singapores will be In cash and CPF top ups as per usual.

Minister said:

“Not all employers have been impacted to the same degree. Those in better shape financially should use all the government support to provide their employees with a more generous baseline wage. Others who are financially stressed and face poor business prospects should be frank with their unions and employees. They should work out together how to use the government support to help each other get through this period of difficulty. One thing is clear: employers should not act unilaterally and put their employees on prolonged no-pay leave or reduced pay, without their consent. To Mr Dennis Tan’s question, employees who need help can approach the Tripartite Alliance for Dispute Management for advisory and mediation services.”

Elaboration:

MOM does not specify what it means by “baseline wage”, although it recommends firms use the 75 per cent wage co-funding from the Jobs Security Scheme to provide for this baseline wage.

Firms who pay their employees less than 75 per cent of their monthly wages — meaning they do not pass on the wage co-funding to their employees — will have to notify MOM.

Unions such as the Air Line Pilots Association - Singapore and Healthcare Services Employees’ Union have been putting up Covid-19 related benefits and information on their websites and Facebook. Metal Industries Workers' Union wrote on Facebook that it has been engaging its partners on employment matters during the pandemic.

There are 67 trade unions listed in MOM’s directory, mostly representing workers from specific companies or trades.

The National Trades Union Congress (NTUC) in February set up a job security council to help match workers to a new job within its network of 4,000 firms before they are retrenched.

The union also has a NTUC Care Fund for union members facing income and money issues and contributes to training funds for self-employed and freelance workers.

Mrs Teo did not say how many employers were found to have acted “unilaterally” in putting employees on prolonged no-pay leave or cutting their pay.

Employers who do so, however, may receive lower Jobs Support Scheme payouts in subsequent tranches.

Minister said:

“The National Wages Council also issued a helpful set of guidelines in March. For example, it encouraged companies to use any lull in their business to train their workers. SkillsFuture Singapore has an Enhanced Training Support Package that covers up to 90% of course fees for employers in selected sectors. Many courses come with an absentee payroll that gives employers in all sectors extra wage support - 90% of the hourly basic salary up to $10 per hour."

Elaboration:

The Enhanced Training Support Package is a funding scheme by education statutory board SkillsFuture Singapore (SSG) to encourage companies to send their workers for training programmes

It has been progressively rolled out to all sectors of the economy, with those found to be more impacted by Covid-19 eligible for more funding.

The scheme has two components. First, there is the enhanced Absentee Payroll, where the Government will cover 90 per cent of workers’ hourly basic salary while they are in training, capped at $10 per hour. Previously, only 80 per cent was covered. This is applicable to all sectors of the economy.

Second is the enhanced Course Fee Support, where the Government will cover 90 per cent of course fees. This is only applicable to six sectors: Air transport, arts and culture, food services, point-to-point and bus transport, retail, and tourism. The training programme must also be relevant to the sector.

In March, it was reported that 8,000 workers in the aviation sector and 10,000 employees from more than 1,000 food and retail companies stand to benefit from government funding for skills upgrading from initiatives by SkillsFuture, NTUC and labour statutory board Workforce Singapore.

The actual take-up rate by companies and number of workers sent for training under this scheme were not found.

Minister said:

“The SkillsFuture Enterprise Credit of 10,000 dollars further helps employers pay for up to 90% of out-of-pocket expenses that are not already subsidised by the Government.”

Elaboration:

The SkillsFuture Enterprise Credit is a three-year scheme announced in Budget 2020. It provides $10,000 for each company and covers up to 90 per cent of costs for its employers to upgrade their enterprise and workforce, such as by redesigning jobs and sending workers for courses.

It is expected to benefit 35,000 enterprises that hire over 1.5 million local workers. Actual take-up rates for this scheme were not found.

Minister said:

“This time round, the Government has made a special effort to also support freelancers and self-employed persons (SEPs).

We expect the SEP Income Relief Scheme (SIRS) to pay out close to 1 billion dollars of cash support to over 100,000 SEPs, with the first payment in end of May. The SIRS scheme was designed and implemented in record time. Those who qualify need not apply and are instead automatically included.”

Elaboration:

An SEP is a Singapore citizen or PR who makes a living without a contract of service to an employer. Examples provided of SEPs include hawkers, taxi drivers and people who run businesses by themselves. Freelancers are considered a subset of SEPs.

SIRS was introduced in the Resilience Budget in March, to provide SEPs $1,000 a month for nine months. It excluded those who were concurrently working as employees and those living in properties with annual value of over $13,000. For married couples, they can only own one property and the SEP’s partner cannot have an annual income of over $70,000.

In April’s Solidarity Budget, the eligibility criteria was relaxed. The property value cap was raised from $13,000 to $21,000. SEPs earning a monthly wage of up to $2,300 from employment work were also enrolled in the scheme. This increased the estimated number of eligible people from 88,000 to 100,000. No changes were made to the additional rules for married couples.

Minister said:

“We know, as a result, there may be deserving SEPs who should also be considered. We therefore appreciate NTUC for stepping forward to help with appeals.

More than that, NTUC is helping through the SEP Training Support Scheme (STSS) which now provides an hourly training allowance of 10 dollars. This comes to about 400 dollars for a week-long course. While modest compared to the income SEPs may have earned in the past, it will still help defray their daily expenditure as they learn new skills during this downtime.

I am very encouraged that already, about 1,800 SEPs will benefit from the scheme.”

Elaboration:

On April 27, NTUC opened online applications for SEPs who did not meet the eligibility criteria and were not automatically drafted into SIRS. It crashed due to high traffic before noon and stayed down till evening the next day. There is no deadline set for applications.

No public data is available on how many appeals have been made through this online platform, nor how many of them have been successful.

Minister said:

“Whether for SEPs or regular employees, finding a job at such times will not be easy.

This is why we launched the SGUnited Jobs initiative in March. By now, more than 16,000 immediate jobs vacancies have been made available. This is already higher than our initial target of 10,000 jobs.

The public sector has taken the lead to partner NTUC’s Job Security Council at e2i, unions, and employers to place more than 3,000 individuals from affected sectors to take on jobs such as safe distancing ambassadors and care ambassadors in various hospitals.”

Elaboration:

SGUnited Jobs initiative is an undertaking by the Government to create new jobs to hold out against the job losses and hiring freezes amid the Covid-19 crisis, announced by Deputy Prime Minister Heng Swee Keat on March 26 as part of the Resilience Budget.

The public sector has been opening up more job opportunities, including short-term jobs in Covid-19 related operations. The Government is also working with trade associations to open up private-sector jobs.

Some 11,000 people have already applied for the 13,000 SGUnited job vacancies, Workforce Singapore – the statutory board fronting the SGUnited Jobs Initiative – said on April 19, about a month after the programme started. Most of these roles are temporary gigs created during the Covid-19 period.

A check of mycareersfuture.sg on Wednesday (May 6) showed more than 17,000 current job vacancies in total.

Minister said:

“In sectors that are still hiring, for example Security, WSG will ramp up the capacity of Professional Conversion Programmes. Through the SkillsFuture Mid-Career Support package, employers can also receive a hiring incentive which provides 20% salary support, capped at 6,000 dollars over six months. This is for new hires aged 40 and above hired through an eligible skills training programme.”

Elaboration:

The Professional Conversion Programme, helmed by Workforce Singapore, caters to mid-career Professionals, Managers, Executives and Technicians who want to switch industries. In 2009, there were 23 programmes available. There are currently 68 programmes listed on mycareersfuture.sg, down from the approximately 100 offered at the start of 2019. New programmes added on in recent years include law, manufacturing and air transport.

The SkillsFuture Mid-Career Support package was introduced in Budget 2020 in February. It aims to double the annual job placement of workers in their 40s and 50s to around 5,500 by 2025. Measures include upsizing reskilling programmes such as the Professional Conversion Programme, providing hiring incentives to employers and retraining credit top-up to employees.

Minister said:

“Our young people are absolutely critical to our future. There are now more than 4,000 traineeship opportunities offered by 280 organisations. We hope more host companies can come forward to help build up the pool of traineeships and give our young graduates the much-needed opportunities to start their careers. Graduates can apply for these opportunities from 1 Jun onwards.”

Elaboration:

The traineeship programme, which aims to provide tertiary graduates with 8,000 traineeship opportunities of up to a year with local companies, was announced as part of the Resilience Budget.

Applications open on June 1 for the first 4,000 positions being offered by organisations such as Singtel, DBS Bank, Surbana Jurong, the National University of Singapore and Nanyang Technological University. This was announced in a joint press release by the Manpower Ministry and Workforce Singapore on April 24.

Trainees receive a monthly allowance ranging from an estimated $1,100 for ITE students up to $2,500 for university graduates, which is pegged to 50 to 70 per cent of median starting salaries. The Government will fund 80 per cent of the allowance with the $100 million set aside during the Resilience Budget for this scheme.