Youth Jobless Rate Hits 10-Year High
By Yoon Ja-young
Staff Reporter
The nation's youth unemployment rate has risen to its highest level in a decade due to the waning effects of economic stimulus measures and lingering economic uncertainties overseas, raising concerns that the unemployment problem is deepening.
According to Statistics Korea Wednesday, the jobless rate for those aged between 15 and 29 reached 10 percent in February, up from 9.3 percent in January. It was the highest mark since it hit 10.1 percent in February 2000, and 1.3 percent higher than a year earlier.
The number of jobless marked 1.17 million in February, rising 244,000 over the last 12 months. The overall official unemployment rate was 4.9 percent, up a percentage point from a year ago.
The quality of employment has also worsened. The number of people working less than 36 hours a week grew 2.5 times to 8.06 million, while those working 36 hours or more a week dropped by 25.7 percent to 14.17 million. This indicates that the job market continues to be sustained by part-time public sector jobs.
"Although Korea's headline unemployment rate was fairly low throughout 2009, it appears to have been artificially depressed," said Alaistair Chan, an associate economist at Moody's Economy.com. He cited the Hope Work jobs creation program of the government, for which 3.2 trillion won was allocated and an additional 5 trillion won was supplemented to create public-sector jobs.
This adds to the concern that the economy may be increasingly plagued by unemployment. While the economy has recovered quickly from the worldwide economic crisis, the job market still remains in a deep slump.
"Despite rising business confidence through 2009, Korean firms were reluctant to hire out of concern that the recovery is not sustainable," Chan said.
The government has been encouraging firms to increase investment to create more jobs, but it isn't likely to work, according to economists.
A survey by the Federation of Korean Industries, the country's top 600 businesses are expected to increase facility investment by 16.9 percent this year. However, this isn't likely to increase jobs, either.
"Since 2000, corporate investment and employment have been less correlated. As the industry turned back to being capital-focused rather than labor-focused, investment is not leading to job growth," said Jeong Yong-taek, an economist at KTB Investment & Securities.
Statistics also showed that an increasing number of people gave up searching for work. Those who gave up the hunt totaled 253,000, up 49.8 percent from a year ago.