Coronavirus weighs on Korean job markets

March to see more pronounced impact of virus

By Lee Kyung-min

The number of those who took temporary leave soared in January, while the service sector added fewer jobs, sparking fears that the economic fallout of the rapid-spreading novel coronavirus is creeping into the nation's sluggish job market, government data showed Wednesday.

The unexpected global health crisis poses a major downside risk to Asia's fourth-largest economy that has yet to see any material impact of the fiscal stimulus package set up to counter damage from the drawn-out U.S.-China trade feud.

Statistics Korea data showed Korea added 492,000 jobs in February form the year before, reporting over 300,000 jobs for the seventh consecutive months.

However, people in their 40s were still isolated from what the government is eager to call a job market recovery as that group lost 104,000 jobs.

Young people aged between 15 and 29 also lost 49,000 jobs, mostly due to weak demand for travel and need-based contract services.

Policymakers and economists expect that Korea will see more dreadful job data in March as the COVID-19 outbreak is becoming a pandemic.

“The survey was conducted between Feb. 9 and 15, before the rapid nationwide spread of the coronavirus,” a statistics agency official said.

“The impact of the virus will be more pronounced in March, after we begin to survey next week. A range of sectors are feared to see a considerable shock to jobs data across the board.”

February data will pale in comparison to those released in March, Yonsei University economist Sung Tae-yoon said. “Korea should brace for more because the worst has yet to come.”

Finance Minister Hong Nam-ki warned of fast-approaching job market deterioration.

“Coming March, the job market will see growing downside risks due to COVID-19. The government will mobilize disinfection efforts with the full resources and capabilities available,” Hong said on his Facebook page.

“The government will closely monitor virus-related shocks on the real economy and policy measures to identify momentum for economic recovery including the job market.”

By industry, service-related industries were showing signs of virus-triggered fallout.

Unusually high numbers of jobs were added by storage and logistics sectors and lost by wholesale and retail due to an increase in delivery services and corresponding decrease in brick-and-mortar stores.

Lodgings and eateries added a mere 14,000 jobs from the year before, the lowest since February 2019.

The figure is troubling given the sectors were a strong job producers adding between 82,000 and 112,000 jobs per month between last October and January.

The arts, sports and leisure sector added only 56,000 jobs in February, the smallest increase from last May when 47,000 jobs were added by the sector. The wholesale and retail sector lost 106,000 jobs.

The storage and logistics sector added 99,000 jobs, the highest increase since 2013 when the agency began compiling related data.

Wholesale and retail shed 106,000 jobs, the steepest drop since August 2018.

Healthcare and social services added 202,000, and the agricultural sector 80,000.