SINGAPORE — Asian unemployment statistics have begun to show the damage from the coronavirus pandemic, with forecasters expecting job losses in some countries to exceed global financial crisis levels in the months ahead.
On Wednesday, Singapore announced that the unemployment rate rose to 2.4% in March, up from 2.3% in December and the highest reading since September 2009. The city-state followed Japan, which on Tuesday said its jobless rate rose 0.1 of a point to 2.5% in March, the highest level in 12 months.
Both sets of numbers offer only an initial picture of the pandemic’s toll: It was not until April that Singapore ordered workplace shutdowns and Japan declared a state of emergency. With the economic chill deepening across the Asia-Pacific region, the International Labor Organization earlier this month estimated that 7.2% of working hours will be wiped out regionwide in the second quarter of 2020, equivalent to 125 million full-time jobs.
Even in the first quarter, the virus reversed a Japanese unemployment rate that had dropped to a low of 2.2% in November and December, amid an acute labor shortage. Positions for non-regular workers plunged by 260,000 on the year in March. Meanwhile, of the 1.76 million unemployed workers in March, 230,000 were jobless because of “circumstances of employer or business” — up by 40,000 from a year earlier.
“The impact of the infectious disease is starting to appear in employment,” Sanae Takaichi, Japan’s internal affairs minister, told reporters. “We should continue to closely monitor [the situation].”
The story is similar elsewhere in Asia. In Hong Kong, unemployment jumped to 4.2% in March from 3.7% in February, hitting a nine-year high. The coronavirus has accelerated the uptrend in joblessness that started last year as civil unrest weighed on the economy.
In neighboring Macao, unemployment rose to a seven-year high of 2.1% in the January-March term, compared with 1.7% in October-December.
Even in Taiwan — widely seen as a virus containment success story — the jobless rate for March ticked up to 3.76% from 3.70% the previous month. This is the highest level since May 2019.
In Southeast Asia, it appears some job losses have yet to show up in official statistics.
Thailand’s unemployment rate for March was only 1%, down from 1.1% in February. Yet a council member at the Thai Chamber of Commerce said on April 13 that 7 million jobs had already been lost in the country, according to local reports. The official said the figure would swell to 10 million if the outbreak drags on for two to three months.
In the Philippines, the Department of Labor and Employment said on Sunday that over 2.07 million workers in the formal sector were either affected by temporary closures or flexible work arrangements.
Pressure to lay off employees is spreading from tourism-related industries, such as airlines and hotels, to manufacturing and other businesses hit by city lockdowns. As a result, Asian unemployment rates are expected to rise further.
Singapore-based economists at Japan’s Nomura earlier this month projected that joblessness in the city-state, South Korea, Thailand and Malaysia would exceed the peaks seen during the global financial crisis over a decade ago. The rates during the 2008-2009 crisis reached 3.2% in Singapore, 3.9% in South Korea, 2.1% in Thailand and 4.0% in Malaysia.
Surging unemployment not only threatens individual livelihoods but also has spillover effects on the broader economy, Nomura warned.
“As the lockdowns ease, the unemployment rate should moderate, but it will likely settle at a higher level than prior to COVID-19, due to its collateral damage,” the economists wrote. “The resulting impact on incomes will act as a drag on demand for discretionary goods and services, and could also trigger indirect effects such as higher delinquencies on unsecured consumer loans and lower housing demand.”
Then there are the social risks — higher suicide and crime rates.
Thailand, where suicides linked to joblessness and poverty were already taking a tragic toll, has seen a number of cases since Bangkok imposed a lockdown last month. A team of Thai researchers studied suicides and attempts after March 26, which the restrictions took effect, and found 38 cases attributed to the lockdown, business closures, job losses and furloughs, the Bangkok Post reported last week.
Well-aware of the dangers, Asian governments started rolling out economic relief measures in February, including cash handouts to the public and wage subsidies for employers. But as unemployment worsens, they may need to do more.
“Policy action has been swift in many countries, but in others the process remains slow,” the ILO noted in the report with its grim forecast. “There are also some questions about the size of the packages, as in some countries they seem too small to serve all needs.”
Emerging countries where many workers toil in the vulnerable informal sector are especially at risk, the organization warned. “Humanitarian assistance and international support to respond to the health and labor market crises will be critical to the lowest-income countries, where fiscal space and capacities are highly constrained.”