Youth unemployment rises to highest in 18 years

By Yoon Ja-young

The jobless rate fell to the lowest level in 10 months but the situation is worsening for young people. The youth unemployment rate rose to its highest level in 18 years in October.

According to Statistics Korea, the number of the employed recorded 26.86 million in October, up 279,000 from a year ago. It means the job market condition has weakened from September, when the number of the employed jumped by 314,000.

The statistics office explained that the contraction of consumption following the long Chuseok holiday negatively affected the job market.

While jobs in the manufacturing sector increased by 28,000, continuing growth for five consecutive months, restaurants and lodgings shed 22,000 jobs. The sector has been decreasing employment due to sluggish domestic consumption coupled with a plunge in the number of Chinese tourists, following Beijing’s economic retaliation. China had restricted packaged tours to Korea for months, to protest Korea’s decision to deploy a U.S. missile defense system.

Though unemployment rate has improved, falling from 3.4 percent to 3.2 percent, the job market is continuing to be tough for young people.

The youth unemployment rate for those aged between 15 and 29 recorded 8.6 percent, up from 8.5 percent a year ago, and the highest October figure since 1999.

The de-facto jobless rate for young people soared from 21.1 percent to 21.7 percent. This counts not only jobseekers but also those seeking a job, those working less than 36 hours a week, and those willing to work though not engaged in job searching activities.

Statistics Korea explained that demographic factors are making the figures look bad.

“Despite the rising employment rate, the number of those entering the job market didn’t increase due to the low birthrate,” said Bin Hyun-joon, head of the employment statistics division at Statistics Korea, explaining why the number of the employed didn’t increase despite the rising employment rate. The number of the economically active population used to increase by over 400,000 year-on-year, but it increased by only 315,000 last month.

The number of the self-employed also increased for two consecutive months, which is a negative signal since many jobseekers here start their own business when they have no other option.

While Korea’s overall employment rate is not significantly low compared with the OECD average, analysts stress that the government should concentrate on raising employment rate of the young people and women.

“The employment rate is continuing to be low for the group aged 15 to 29, and females aged 30 to 49. It is due to diverse factors such as weakening potential for job creation, lack of decent jobs, and the social structure which makes it difficult to achieve work and life balance,” said Oh Jun-beom, a researcher at Hyundai Research Institute.

He stressed that the government should not only encourage young people to enter the job market but also provide support to match them with appropriate jobs.