Value context and insight. lkm@koreatimes.co.kr
Korea suffers biggest job loss since 1999 amid pandemic
By Lee Kyung-min
Self-employed, temporary workers hit hardest
By Lee Kyung-min
Korea suffered its biggest monthly job loss in over 21 years in April, with the country losing more than 470,000 jobs last month as a result of businesses hiring being slashed due to the fallout of the COVID-19 pandemic.
Temporary and irregular workers were hardest hit, while job losses were most pronounced in wholesale, retail, lodgings, tourism and education services, the sectors hit directly by social distancing and lockdowns.
More worrisome is a sharp decline in exports over the past few months, a major indication of rapid job losses in the manufacturing industry, which had been showing signs of recovery in early 2020 before the outbreak of the coronavirus.
According to data released by Statistics Korea Wednesday, 476,000 lost their jobs in April from a year earlier, the highest number since 658,000 in February 1999 when the country was reeling from the fallout of the Asian financial crisis.
Of the total, about half, or 245,000, were aged between 15 and 29, pushing down the youth employment rate to 40.9 percent, down 2 percentage points from a year earlier.
The year-on-year drop began in March, ending an employment uptrend that had continued for 23 consecutive months since June 2018.
Lodgings and eateries businesses cut 212,000 jobs and 130,000 were lost in education businesses.
Over 587,000 jobs were lost by temporary workers, the sharpest decline since January 1990. Some 195,000 day laborers also found themselves unemployed.
The economically active population dropped by 550,000 from the previous year, after delayed or cancelled hiring plans led many to give up their search.
The number of temporary layoffs was 1.48 million in April, a slight decrease from a record-high of 1.6 million in March.
“The April figures are mirroring the miserable reality in the job market. But the fear is that we cannot expect any improvement for the time being,” said Yonsei University economist Sung Tae-yoon.
Second quarter export figures are, in his view, feared to suffer a steep drop, as indicated by April data and early May data, dealing a heavy blow to the country in the months to come.
The country's auto exports plunged by 80.4 percent from May 1 to 10 from a year ago, while external shipments of petroleum products and wireless telecommunication devices dropped by 75.6 percent and 35.9 percent, respectively.
The sharp decline in major export items drove down total exports, which came in at $6.9 billion, a drop of 46.3 percent from the same period last year.
Sung stated that people will lose jobs, and the economy will take a turn for the worse, in what he called a “tailspin with no end in sight.”
“Those temporarily laid off are highly likely to be permanently let go if the economy fails to pick up due to the virus. It will be much more brutal than previously thought,” he said.
Deputy Prime Minister and Finance Minister Hong Nam-ki said the government will promptly execute economic relief packages set up to help those hit by the virus, including those who are not subscribed to the state-run Employment Insurance.
The government is mapping out a plan to create some 550,000 jobs for low-income people within the next two weeks.