Despite the global supply chain disruption and geopolitical events, Singapore’s economy has remained resilient as it charts a path to recovery from the Covid-19 pandemic.grew by 4.8 per cent in the second quarter of 2022 and the unemployment rate was at 2.1 per cent in June.
Even before the pandemic, the National Wage Council had been urging firms to adopt the FWS, but adoption remains lower than satisfactory. Hence, during a downturn, the unemployment rate will increase because the firms are only left with the option of retrenching their workers to save cost for business survival as they would not want to risk losing the best employees.
Currently, the firms that adopt MVC only allocate up to 10 per cent of the wage components in the form of MVC. When the economy recovers, the working hours banked during the recession can be used to offset the extra working hours. The manufacturing sector and the construction sector also experienced a high productivity growth rate of 21 per cent between 2020 and 2021, more than twice the average productivity growth rate of 9.5 per cent.