Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Unemployment benefit payments hit record
A crowd of people pack an employment welfare center to listen to a seminar in Seoul, Monday. Yonhap
By Lee Min-hyung
By Lee Min-hyung
Unemployment benefits paid out in July hit a new record high, as the local job market continues to suffer from the impact of the COVID-19 pandemic, data from the labor ministry showed Monday.
According to the Ministry of Employment and Labor, the amount paid in unemployment benefits soared to 1.18 trillion won ($1 billion) last month, up 56.6 percent from a year ago.
The monthly figure has hit a new high each month since February 2020 when the pandemic started making a negative impact in terms of economic activities here. The amount of benefits issued surpassed 1 trillion won in May for the first time.
In July, the number of new applicants for unemployment benefits came in at 114,000, up 12.9 percent from the previous year. Some 731,000 people received the benefits last month, which is also a record high.
The virus shock reached its peak in the second quarter of this year, and has since shown signs of gradually subsiding.
Despite the month-long lull in the spread of the virus, the latest data indicated that the economy is still suffering difficulties from the aftermath of the pandemic spread, according to economists. The shock is also aggravating the unemployment crisis particularly among young jobseekers, further data released by the ministry showed.
The number of employment insurance subscribers decreased among groups aged below 40. The figure among those below the age of 30 dropped by 71,000 in July from a year ago, the biggest fall among all age groups. The figure for those in their 30s fell by 56,000 during the same period.
This is in contrast to a rise among middle-aged groups. The number of employment insurance subscribers in July surged by more than 170,000 among those in their 60s or over. The figure for those in their 40s and 50s also increased during the same period.
The decline among the young age groups was because major companies scaled down their plans to hire new employees in the first half of the year due to the coronavirus outbreak.
Yonsei University professor Sung Tae-yoon said it was natural for the amount of unemployment allowance benefits to have surged in recent months, at a time when the local economy has faced a steep virus-induced decline.
“The rise in the figure is inevitable at this period of prolonged economic downturn. Authorities need to tighten monitoring on those repeatedly getting and quitting jobs on purpose to keep receiving the benefits from the government,” he argued.