Commentary: Singaporeans hard hit by COVID-19 still have job opportunities, but must seize them

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SINGAPORE: It’s been said time and time again, but this pandemic is unlike any other economic cycle in history.

It sparked a series of drastic structural changes in Singapore’s economy and sectors that have thrived for decades – like tourism and travel – have found themselves looking through the barrel of a very frightening weapon.

That’s why this year’s budget had to tap into the country’s reserves to support workers and businesses that still needed help, and set the stage for them to pivot to a very different future.

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A key element of this strategy is the employment support program which will be extended in a targeted manner. Businesses in sectors severely affected by the pandemic, such as aviation, aerospace and tourism, will continue with wage support from April to September.

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For other sectors, including restaurants, retail and marine, salary support will be extended from April to June.

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This temporary wage support scheme is essential to prevent the risk of bankruptcy and avoid massive layoffs – which will deeply affect households.

The alternative would have been to let a large number of companies – some of which are well established – go out of business and the workers out of work.

It takes time to build successful businesses, some brands have been built with care over the years and now is not the time to leave them to fend for themselves.

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People walk during their lunch break in Singapore’s Raffles Place financial district on January 11, 2021 (Photo: TBEN / Roslan RAHMAN)

Many are fundamentally strong and just need more time and support to survive this extraordinary and temporary negative shock. After all, closed borders are totally out of their control.

SHORT-TERM HELP, LONG-TERM BENEFITS

Keeping current workers on the job also brings immediate and long-term benefits. The most immediate is the prevention of further financial difficulties resulting from the pandemic.

It is also important to note that the human capital of workers on leave who have experienced a long period of unemployment will erode and this in turn will result in lower wages upon re-employment.

Workers separated from struggling firms suffer long-term wage losses of 25 percent per year on average, according to a 1993 article in the American Economic Review.

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In addition, human capital tends to deteriorate dramatically with long spells of unemployment and this in turn can translate into higher unemployment in the future, as a 2008 study on European unemployment shows.

Thus, a targeted measure such as the employment support program can counteract the serious negative long-term effects that this crisis can have on workers and businesses.

In addition, by expanding its support through SGUnited Skills and allocating an additional $ 5.4 billion to a second tranche of the Jobs and Skills package, the government will help minimize the long-term effects on those who are displaced.

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ASSOCIATE JOB SEEKERS WITH JOBS

For Singaporean job seekers, of the additional $ 5.4 billion allocated this year to the employment and skills package, $ 5.2 billion will be devoted to the job growth incentive (JGI) in the aim to hire 200,000 inhabitants.

DPM Heng Swee Keat 2021 Budget Statement

Deputy Prime Minister Heng Swee Keat presents the 2021 Budget Statement on February 16, 2021.

This is in addition to the S $ 3 billion set aside last year for the same initiative.

There is already evidence that these programs can support mid-career job seekers and new graduates seeking full-time positions in growing companies.

During the two months of JGI implementation last year, 110,000 local job seekers found employment. The S $ 5.2 billion allocated to the JGI will now allow the recruitment window to be extended by seven months until September.

Providing support to young graduates is essential for the future of the country. Going into a recession can have long-term consequences beyond the period of recession.

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An article published in 2021 in the American Economic Journal: Applied Economics showed that those unlucky enough to graduate during a recession tend to start up in small businesses and lower paying jobs. They also have large initial earnings losses – about 9 percent of annual earnings.

This gap does not disappear until about 10 years after graduation.

For this reason, these targeted measures, along with increased support for new graduates, can help counter this detrimental effect that a pandemic-induced recession can have on their lifetime earnings.

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KEEP AN EYE ON THE FUTURE

While the first thing to do has been to keep Singaporeans safe and protect their livelihoods in this crisis, it is also important to keep an eye on the future.

Operator wearing PPE wipes down COVID-19 swab testing robot called SwabBot during demonstration

An operator wearing personal protective equipment (PPE) wipes the coronavirus disease (COVID-19) swab testing robot called SwabBot at a protest in Singapore on September 25, 2020. REUTERS / Edgar Su

Given the dynamic nature of technological progress and the disruptive nature of the current pandemic, some jobs will simply disappear for good.

In a recent study of the global economy, more than 80% of companies say they are accelerating the automation of their work processes.

Jobs at high risk of displacement include data entry clerks, administrative and executive secretaries, accountants and auditors, assembly and plant workers.

On the other hand, there will be a growing demand for data scientists, digital and strategy specialists, and process automation specialists.

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But it means a host of new opportunities. For example, we have seen a boom in medical devices, biotechnology, and technologies that provide solutions to food production and education, among others.

In his speech, Deputy Prime Minister Heng Swee Keat announced more initiatives for businesses to embrace digitization and new cutting-edge technologies.

These high-quality, high-demand jobs are sure to be found in innovative, R&D intensive industries.

In addition, in the manufacturing sector, the Minister of Finance also announced a reduction in the quota of foreign workers, indicating that there will be more jobs for locals in this sector which is now forced to be more productive and less labor intensive.

Singapore factory

A worker at a manufacturing plant in Singapore. (Photo: TODAY)

Therefore, the jobs Singaporeans get in manufacturing over time are expected to be high value-added. As long as these measures are in place, Singaporeans have every reason to be optimistic, even if they are concerned about the skills mismatch.

But there is no shortage of opportunities to learn a completely new trade – many who have worked in the same industry all their lives have managed to change jobs after training and certification. The key is for workers to take that leap.

A successful country will be a country that can prepare a vibrant and dynamic workforce with the right skill set to reallocate workers into these sectors.

An increased demand for skilled workers will increase incomes and provide a supply of relevant and quality jobs in the future.

With the 2021 budget, the government pulled the right levers to help Singaporeans keep their jobs or learn new skills, so that if there is another shock in the system, they can withstand the pressures a little better.

LISTEN: A union MP, business leader and economist describe the changes underway in Singapore’s 2021 budget on TBEN’s Heart of the Matter podcast:

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Dr Cai Daolu is a faculty member in Strategy and Policy at NUS Business School.

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