Around the world, the COVID-19 pandemic had dashed hopes of a better future. In Asia Pacific, it caused the loss of about 81 million jobs in 2020, a new report by the International Labour Organisation reported.
The unemployment rate in many countries has risen from a single digit to double digits. It still remains as a single digit for Singapore, hovering between 2 per cent to 5 per cent. In fact, the November statistics fell for the first time in 2020. The overall unemployment rate for Singapore fell to 3.3 per cent in November, while the citizen unemployment rate fell to 4.7 per cent.
Jobs had fallen, but fiscal support and the gig economy had cushioned the fall. Since the pandemic, the Singapore government had set aside over S$100 billion to stimulate the economy and keep jobs. The Jobs Support Scheme (JSS), for example, subsidises a substantial amount of local employees’ wages for many months. The gig economy, meanwhile, allowed those who were partially employed or unemployed to earn some living through gigs. For example, during the circuit breaker, some Singapore Airlines employees were temporarily deployed as care ambassadors in the healthcare sector.
Why does the gig economy work here? Since the Singapore government subsidises about half of the usual wages, the employee may turn to gigs to make up for the other half. After trying it out, some may like it so much that they continue as a gig worker after the circuit breaker. The trade-off that employees have to make is freedom versus job security. Hence, some may realise that this does not provide job security and go back to their old jobs.
In other regions such as the United States and Europe, where unemployment benefits are given out, the unemployed may not wish to undertake work as a gig worker. The uncertainty of wages as a purely a gig worker is too high, and once you work on a gig, you would be ineligible for the unemployment pay-out. Thus, the unemployment status stays and the gig economy does not take off.
Another reason, the gig economy has been more pronounced in Singapore is due to the rise of ride-hailing platforms and food delivery riders. During the circuit breaker and thereafter, there has been an increased reliance on these services. While we see an upward trend, I think it will come down some time in the future, and remain flat. When the economy starts to recover, more employees will return to long-term jobs with job security.
What lessons can we take away from this phenomenon? The gig economy has done well in cushioning citizens from unemployment. In the upcoming Singapore Budget, perhaps a larger share of it can be allocated to support the gig economy. After all, it is more resilient to the financial shocks the society experiences. The funds can go towards training employees in various skills. Employers can receive more subsidies to hire gig workers.
Some may say that a push for the gig economy may be “a waste of talent”—these gig workers could be working in full-time plush jobs instead. But it is not a waste of talent. Seeking jobs is a matching of expectations. The gig job disdained by some may be a dream job desired by others.
Market forces will determine whether the gig economy goes up or down. But let’s keep it, because in times of crises, it will be a good cushion for the workforce.