Page 73 - AEI Insights Vol. 7 2021

Jingyi et al, 2021

although this form of coping mechanism can be limited by the restrictions on the movement of
individuals.
The shock to the labour demand is also reflected in the rise of retrenchment of workers, salary
reduction, revoked job offers and unpaid leave. The Malaysian Association of Hotel reported
that from a total of 54,299 workers in the hotel industry in Malaysia, nearly 4 percent (2,041
workers) were laid off, 9 percent (5,054 workers) faced pay cut and nearly 18 percent were
given unpaid leave during the MCO (Foo et al., 2020). In Vietnam, approximately 31 million
employees were adversely affected by the COVID-19 pandemic, with 900,000 out of jobs and
up to 18 million receiving lower income. The International Labour Organisation has predicted
working hour losses where the overall reduction of working hours for the second quarter of
2020 in Southeast Asia is forecast at 12.7 percent, which is equivalent to 35 million full-time
workers (ILO, 2020).
Furthermore, as job losses continue to escalate amid the pandemic, vulnerable workers such as
those working in informal sectors, self-employed workers, gig workers, migrant workers, and
micro, small and medium enterprises are facing a tough labour market and also at risk of losing
livelihood due to lockdown. These working classes have a greater problem as they are less
protected by social security schemes and other forms of income smoothing, leading to their
susceptibility to the pandemic. These groups of workers and their families would have no way
to live without other sources of income. Income losses and lack of income assistance in some
ASEAN countries have contributed to more hardship for many informal sector workers pushing
them further into working poverty as the number of hours worked falls along with decreasing
economic activity (ILO, 2020c). Furthermore, households and families are in danger of being
evicted, particularly when the disposal moratoriums expired, and households are struggling to
pay back due rent.

The COVID-19 has also affected vulnerable and disadvantaged groups such as youth, women,
and elderly depending on their condition in the labour market. Youth belongs to the age
category of most vulnerable to retrenchment (ILO, 2020d; Lee, 2020). Fresh graduates will
face the challenge of seeking their first job in the labour market with extremely limited demand
(ILO, 2020d). The effect of the pandemic would be greater for young job-seekers as they would
have a reduced "wage reservation," which is the lowest salary at which a worker will be able
to accept a certain form of work – relative to experienced workers (Lee, 2020). A high
proportion of women were found in the informal sector, particularly in ASEAN's low and
middle-income countries. Unregistered jobs make up an estimated 78 percent of Southeast
Asia's total workforce, while women make up the bulk of the informal sector in Myanmar, Lao
PDR, Cambodia, Philippines, and Indonesia. Part of the gender gap is explained by the
existence of the shock and the disproportionate effect on employment and industries in which
more women are working (Alon, Doepke, Olmstead-Rumsey, & Tertilt, 2020). Therefore,
women are less likely to withstand economic shocks than men (WTO, 2020).

Nevertheless, COVID-19 is reshaping ASEAN’s digital landscape in the labour market by
bringing about significant change in the way of how work is done during the time of crisis as
the pandemic has forced company and organisations to adopt remote work or work from home
(WFH). As workers could abide by the social distancing while working, teleworking will

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