Media Statement by Dr. Ong Kian Ming, Member of Parliament for Bangi and Assistant Political Education Director for the Democratic Action Party (DAP) on the 5th of June, 2020
Responding to the COVID Economy: Part 2 – Understanding the Employment Shock
- Loss of Employment (LOE) as recorded by the Employment Insurance System (EIS) increased by 72% in April 2020 (compared to April 2019). Projected to increase by at least 2 half times in 2020 (compared to 2019)
- Jobs at risk in the 5 most vulnerable sectors (Travel & Tourism, Wholesale & Retail, Construction, Manufacturing & Agriculture) estimated at 1.67 million. Unemployment in 2020 likely to be far higher than the current projection of 4% by Bank Negara Malaysia (BNM). Range between 8% to 14% likely.
- The Wage Subsidy Program (WSP) and the Employment Retention Program (ERP) have definitely helped businesses but no evidence that they have ‘saved’ 2.4 million jobs
- Key policy recommendations – pass a COVID Relief Bill (but may be too little too late), targeted incentives and policies to revive the most affected sectors, extended financial assistance to businesses and cash transfers to individuals especially those without EIS protection
One of the most significant economic impact of the COVID crisis is the loss of employment. In the United States, for example, the unemployment jumped from 3.5% in February 2020 to 14.7% in April 2020, a level not reached since the Great Depression, which lasted from 1929 to 1933. In Malaysia, on the surface and in the official statistics (for now), we have not seen a significant increase in the unemployment rate. Even though the unemployment rate increased from 3.3% in February 2020 to 3.9% in March 2020 (or an increase in the number of unemployment from 525,000 to 611,000 in on month), Bank Negara Malaysia (BNM) is projecting the overall unemployment rate to increase to 4% in 2020.Continue reading “Responding to the COVID Economy: Part 2 – Understanding the Employment Shock”