Wage subsidy programme termination will not increase unemployment rate - Socso
BERNAMA
06/02/2021
KUALA LUMPUR, Feb 6 -- The termination of the Wage Subsidy Programme (PSU) will not contribute to increase in layoffs or unemployment rate, said Social Security Organisation (Socso) chief executive Datuk Seri Dr Mohammed Azman Aziz Mohammed.
He said this was based on the results of a survey conducted by the EIS-UPMCS Centre for Future Labour Market (EU-ERA) involving 469 companies receiving the PSU.
The survey found that only 15 per cent of the respondents plan to reduce their employees, while 29 per cent plan to increase their manpower and over half or 56 per cent intend to retain the existing employees.
"The results of this survey also support the government’s targeted PSU for this year as contained in the 2021 Budget," he said in a statement today.
The PSU designed, by the government as direct financial assistance to companies to maintain employment during the COVID-19 pandemic, was launched on April 1, 2020, initially to cover financial assistance for six months and later another three months under PSU 2.0.
As of Dec 31, 2020, over 3.7 million employees and 428,516 employers have benefited from both the programmes.
The termination of the PSU has led to public debates over the extent of its impact on employment and subsequently its implications on unemployment rate.
Mohammed Azman said the online snap survey was aimed at assessing the impact of PSU termination on employment from Oct 30 to Nov 22 last year and the results of the survey were detailed in The Day After Tomorrow Report: Estimating the Impacts of Ending Temporary Wage Subsidy Programme.
However, he said the findings of the survey did not take into account the economic impact due to the implementation of the Conditional Movement Control Order (CMCO) in the Klang Valley which started on Oct 14 last year and the implementation of the Movement Control Order (MCO) 2.0 on Jan 13, 2021.
He added that the CMCO and MCO 2.0 are expected to have a moderate impact on economic recovery which would then have the potential to affect employment.
EU-ERA is a collaborative research centre between SIP Socso and Universiti Putra Malaysia Consultancy & Services (UPMCS).
