Value context and insight. lkm@koreatimes.co.kr
Job market woes deepen in Korea
By Lee Kyung-min
January figure comparable to 1998 Asian financial crisis
By Lee Kyung-min
Korea shed 982,000 jobs in January following social distancing measures that were strengthened on Dec. 8 due to a third wave of COVID-19 infections, continuing a rapid decline in jobs seen over the previous 11 months.
Data from Statistics Korea showed Wednesday that the year-on-year decline of nearly 1 million jobs amid the pandemic was the sharpest drop, comparable to 1.27 million lost in December 1998 in the aftermath of the Asian financial crisis.
Employment data in the forthcoming months is not expected to show a dramatic recovery since small- and medium-sized enterprises (SMEs) remained shut for the final two months of 2020 and have barely resumed operation in January.
The 11-consecutive-month decline is the second-longest period of worsening unemployment since the 16 months from January 1998 to April 1999 following the Asian financial crisis. It already surpassed the previous eight consecutive months of decline from January to August in 2009 during the global financial crisis.
Seoul National University economist Kim So-young said low-income earners will continue to bear the brunt of the pandemic.
“Government orders to shut down pushed many minimum wage workers out of work. The lives of many small business owners have been devastated following the repeated strengthening of social distancing rules, with their extremely strained financial condition unlikely to improve any time soon,” he said.
The number of employed people stood at 25.8 million in January, down 982,000 from a year earlier. The service sector reported a year-on-year loss of 898,000, dented chiefly by the enforced shutdowns and reduced business hours. The brunt was borne largely by low-income earners, as illustrated by temporary workers having lost 563,000 jobs, followed by day laborers (232,000) and the self-employed (158,000).
The number of people who said were on “temporary leave,” a group categorized statistically as economically active, jumped to 892,000, up 346,000 from a year earlier. The group could lose jobs altogether if the pandemic drags on.
The number of unemployed, statistically defined as those who are willing, able and seeking work, hit a record high of 1.57 million, up 417,000 from the year before, the highest since June 1999, when the statistics agency began compiling related data.
The number of people who said were “resting,” a group not willing to work and therefore statistically categorized as economically inactive people, hit a record high of 2.7 million, up 379,000 from a year earlier.
First Vice Minister of Economy and Finance Kim Yong-beom, center, speaks during a press briefing at the Seoul Government Complex in Gwanghwamun, Wednesday. Courtesy of Ministry of Economy and Finance
Deputy Prime Minister and Finance Minister Hong Nam-ki said the government is well aware of the grim job market conditions.
“Policy priorities will be placed on reducing the difficulties in people's livelihoods and quick job market recovery,” he said on Facebook.
“Over 900,000 job openings will be made available at state-run organizations within the first quarter. A 9.3 trillion won ($8.3 billion) relief package will be offered to those under strained financial conditions. We will remove regulatory hurdles to help firms increase investment and create high-quality jobs. The government will also speed up efforts to set up tailored job creation measures for young people and women to be announced before April,” he added.