Value context and insight. lkm@koreatimes.co.kr
No. of unemployed hits worst level in 21 years
By Lee Kyung-min
Economically inactive population reaches record high
By Lee Kyung-min
The prolonged COVID-19 pandemic has continued to wreak a havoc on the job market, with the number of jobless rising to the highest level in 21 years in July, according to the latest data, Wednesday.
Statistics Korea said the number of jobless people came to 1.13 million in July, the highest figure for the month since 1999 ― the figure stood at 1.09 million in 2019, 1.03 million in 2018 and 958,000 in 2017.
The gloomy job market is illustrated more clearly by the country's monthly job loss extending for the fifth consecutive month.
The continuous job losses that began in March are the longest since 2009 when the country saw losses for eight consecutive months from January through August following the global financial crisis.
The country lost fewer jobs in July compared to June (352,000) and May (392,000), but concerns are growing given that most of them were held by low- to mid-income earners in the hardest-hit industries including lodgings and eateries (225,000), wholesale and retail (127,000) and manufacturing (53,000). Korea lost 277,000 jobs in July, down 1 percent from a year earlier.
The number of those on temporary leave ― statistically considered employed ― spiked to 685,000, up 53.7 percent from the year before.
The July figure is lower than 729,000 in June, but the higher-than-usual year-on-year figure is another major cause for concern as the losses could become permanent in the coming months if the pandemic drags on.
Deputy Prime Minister and Finance Minister Hong Nam-ki said on Facebook that the job market was showing “a clear sign of recovery because the number of job losses are decreasing,” an assessment received critically by most economists.
“The view is rather off, to put it mildly,” Seoul National University economist Kim So-young said. “The number of jobs lost was significantly higher in April and May compared to July, not because the economy has rebounded since but because businesses suffered far greater during those months. The problem is how best to help those who are struggling following a substantial reduction in or outright loss of income.”
What is of more concern is that the economically inactive population has hit its highest level in history, raising fears that a growing number of people are being forced out of the job market due to the unrelenting fallout from the coronavirus.
The number of people out of the workforce came to 16.55 million, up 502,000, or 3.1 percent from a year earlier, the highest monthly figure since 1999 when the statistics agency began compiling related data.
Statistically, those employed and unemployed are both considered economically active which totaled 28.24 million in July. Layering the 16.55 million, the two groups make up about 44.8 million people aged over 15, a statistically significant group in its contribution to the economy.
Economically inactive people are defined as those that are neither employed nor seeking work and therefore not considered to be in the workforce. This can be due to childrearing, taking care of housework, retirement, illness or being a student. Also included are those simply “taking a rest.”