SINGAPORE -- Unemployment in Singapore rose to 2.9% in June, according to preliminary quarterly data released on Wednesday, approaching the level seen during the global financial crisis days in 2009 and reflecting the impact of COVID-19 across the region.
Jobless rates in many Asian economies are expected to remain high in the coming months, as businesses struggle in the pandemic.
Singapore's latest rate is up from 2.4% in March. Retrenchments more than doubled in the second quarter, to 6,700, from 3,220 in the first.
"Conditions for travel-related sectors remain very challenging. COVID-safe management measures will also moderate the pace of recovery in other sectors," the Ministry of Manpower said in a statement. "Hence, softness in the labor market is likely to persist with continued weakness in hiring and pressure on companies to retrench."
Other economies have also reported higher jobless rates for June. Hong Kong's rate jumped to 6.2%, from 5.9% in May, surpassing the peak of 5.5% during the global financial crisis. Neighboring Macao posted 2.5% unemployment in June, up from 2.4% in May.
Japan's figure for June is due to be released on Friday morning. The country's rate for May stood at a three-year high of 2.9%. Unemployment was highest among those aged 15 to 24, at 5.1%, showing that the younger generation faces the strongest headwinds.
Malaysia's jobless rate started to rise in February and reached 5.4% in May.
Economists at Singapore's United Overseas Bank said in a report earlier this month that Malaysia's jobless rate should rise at a slower pace during the recovery phase and "eventually stabilize between 4% to 5%, which remains above pre-pandemic levels of 3.2% to 3.3%, as businesses continue to adjust in a new post-pandemic environment."
A staggering amount of work is being wiped out regionwide.
In a report published on June 30, the International Labor Organization said that working-hour losses for the second quarter, relative to the last quarter of 2019, were estimated to reach 13.5% in the Asia-Pacific region. That is equivalent to 235 million full-time jobs.
The ILO said a full recovery in labor markets is likely to remain a long way off by the end of 2020. In its baseline scenario, the loss of global working hours would be 4.9% in the final quarter of this year, relative to the last quarter of 2019.
In Indonesia, National Development Planning Minister Suharso Monoarfa told a parliamentary hearing in late June that 4 million to 5.5 million people could lose their jobs this year, pushing the unemployment rate up to 8.1% to 9.2%, versus 5.28% in 2019.
The pandemic started to bite labor markets earlier this year, beginning with vulnerable sectors like tourism. Some businesses that withstood the early pressure through other cost-cutting measures have begun to resort to layoffs. In June, Singapore's ride-hailing giant Grab cut 360 jobs, or some 5% of its staff, while Indonesian rival Gojek cut 430 jobs, or 9% of its workforce.
Official unemployment figures may not reveal the full picture of the devastation, as workers in informal sectors are also vulnerable to the pandemic.
Surging unemployment has spillover effects on the broader economy, putting politicians under intense pressure to find solutions. In Singapore, jobs were one of the top issues in the campaign for the July 10 general election, which saw the opposition make unprecedented gains against the ruling People's Action Party. Singapore's and other governments have provided job support schemes to cushion the impact.
Meanwhile, there are some positive glimmers in the region. Taiwan and South Korea -- both of which have won praise for their handling of the virus -- have seen improvements in their labor markets. Unemployment in Taiwan fell to 3.97% in June, from 4.16% in May, while South Korea's rate ticked down to 4.3% from 4.5%.