By Kim Tong-hyung
The continuing decline in the jobless rate has policymakers declaring they have unemployment under control. But the alarming number of people deemed to be economically inactive has critics raising serious questions about the government claims.
More than 17 million working-age Koreans were not in paid employment in February, according to official figures released Thursday by Statistics Korea. This includes the 1.09 million unemployed, plus another 16.4 million who did not have a job and stopped looking for one.
Those sidelined from the labor market accounted for more than 40 percent of the country’s 40.8 million people over the age of 15, according to data from the national statistics office, providing a further indicator of subdued economic activity that is now coupled with soaring inflation.
Although about 469,000 new jobs were created in February, virtually all of them went to people between the 40s and 60s, suggesting that the employment statistics were padded by those in part-time and casual jobs.
Youth unemployment remains a serious issue here. The unemployment rate among those between 15 and 29 was measured at 8.5 percent in February, remaining above the 8 percent mark for the third consecutive month.
In a meeting between economy-related ministries, Strategy and Finance Minister Yoon Jeung-hyun observed that the overall labor market conditions have been improving, but before admitting that the high number of young people out of work is a serious concern.
``Compared to what it was before the economic crisis, the overall number of jobs remains insufficient. The manufacturing industry’s ability to create new jobs has deteriorated and caused unemployment among the youth,’’ he said.
``The government has been exploring a variety of ways (to spur job creation), such as implementing plans to advance service industries and support new industrial growth sectors. But we must not rely on macro policies and look more carefully into our employment support policies and find areas for improvement.’’
The 1.09 million unemployed ― those out of work but actively searching for a job ― was a drop from the 1.16 million in the same month last year but was up from the 918,000 in January.
The country’s 57.1 percent employment rate last month represented 0.5 percent annual growth, while the 4.5 percent jobless rate was a slight improvement from the 4.9 percent of last year.
The Finance Ministry referred to the sliding unemployment rates to back its argument that economic activity is picking up, claiming in a news release that the private sector employment condition is showing ``sustained improvement.’’
Critics have long accused government officials of softening the jobless total by inflating the economically-inactive category.
The economically-inactive group conventionally includes students, those looking after families or homes, the short- and long-term sick and people who have retired early. But Korean officials also count first-time jobseekers and jobless people preparing for public servant exams as economically inactive. Koreans who have worked for at least an hour in a week are labeled as employed.
When combining the number of first-time jobseekers and those working less than 18 hours per week, Korea’s real unemployment rate soars into double digits, according to some observers.