Government support was pivotal in avoiding a higher unemployment rate of 7.5 percent in 2021, said the Ministry of Finance (MOF). In a report assessing the impact of key Covid-19 budget measures over 2 years, the unemployment rate fell to 3.5 percent in 2021. In 2020, support measures shaved off 2 percentage points from the projected unemployment rate from 6.1 to 4.1 percent. Government support over 2020 and 2021 helped to support both the labour market and the GDP, limiting the impact of the pandemic on Singapore’s economy.

(Image Source: Channel News Asia)

Schemes such as the Jobs Support Scheme (JSS) for wage support, SGUnited Jobs and Skills package, and Jobs Growth Incentive promoted the hiring of locals, reduced job losses, and supported residents in job finding and skills learning. MOF estimated that JSS saved 165,00 local jobs from March to December 2020 while the Jobs Growth incentive encouraged employers to hire an additional 47,000 more locals, slightly increased the proportion of mature workers hired and improved the average wages of new hires. SG United and Skills package helped locals, especially fresh graduates, enter new jobs or pick up fresh skills in a depressed labour market.

The labour market is set to recover and is expected to fall to pre-pandemic levels this year. The employment rate of university graduates was comparable to pre-pandemic times although the slower recovery in aviation and tourism affected polytechnic and ITE graduates more as higher numbers of graduates were enrolled in related courses.

The income gap narrowed with Singaporean households receiving an average of $2,200 per member from Covid-19 support measures in 2020 and lower-income households getting more benefits. These measures led to a decline in the Gini coefficient (a measure of income inequality after taxes and transfers) to 0.375 in 2020 among resident-employed households. When one-off pandemic reliefs were halted, it rose to 0.386 in 2021.

Real median income per household member increased by 2.8 percent in 2021 after a decline of 1.2 percent in 2020. At the 20th percentile, real income per household member increased by 5.5 percent.

Do you think that the government measures were effective in preventing job losses during the pandemic?