Employment Indicators Built on Ultra-Short Term and 60s... Manufacturing and 40s Are Shaky

Last Year, Number of Employed People in Their 60s Reached 377,000, the Highest Since Statistics Began

Jobs for People in Their 40s Decreased by 162,000... Those in Their 30s Also Declined

Experts Warn Against Artificial Job Creation for Those in Their 60s... "Need to Encourage Corporate Investment"

[Asia Economy Reporters Kim Hyunjung, Kim Minyoung] Last year's improvement in employment indicators was due to the base effect following the previous year's employment slump, an increase in the number of employed people aged 60 and over driven by fiscal policy, and a surge in short-term jobs. Meanwhile, employment rates for people in their 40s, which contribute to real economic growth, and the number of manufacturing sector employees actually declined, highlighting the urgent need for more fundamental measures such as revitalizing corporate investment.

◆ Record Increase in Jobs for People in Their 60s = According to the 'December 2019 and Annual Employment Trends' released by Statistics Korea on the 15th, the number of employed people aged 60 and above last year reached 377,000, the highest since statistics began in 1963. Even considering the structural trend of an increasing population in this age group, this figure represents a 61% surge compared to the previous year (234,000).

Along with the increase in employed people aged 60 and above, the number of 'ultra-short-term jobs' involving 1 to 17 hours of work per week also surged. The number of employed people in ultra-short-term jobs increased by 301,000 last year, marking the largest increase since 1980. Considering that the increase in short-term jobs was greater than the increase in jobs with 36 hours or more per week (105,000), it can be concluded that last year's employment upswing was largely driven by the government's short-term job programs. Moreover, since most of the elderly job programs promoted by the government are part-time and short-term contracts with short average weekly working hours, wages are low, leading to criticism regarding the poor quality of employment.

On the other hand, the employment market for people in their 40s and the manufacturing sector, which can be considered the backbone of economic activity, remains mired in stagnation. Looking at annual employment numbers by industry, the health and social welfare services sector, closely related to government job programs, saw the largest increase with 167,000 new jobs, followed by accommodation and food services (61,000) and professional scientific and technical services (60,000). However, the manufacturing sector, which tends to have more stable regular positions, lost 81,000 jobs last year, while wholesale and retail trade and finance and insurance sectors lost 60,000 and 40,000 jobs respectively. Notably, the decline in manufacturing employment was the largest since 2014 (152,000) and marked the fourth consecutive year of decline since the shipbuilding industry restructuring began in 2016.

◆ Largest Decrease in Jobs for People in Their 40s in 28 Years = The manufacturing sector downturn dealt a direct blow to jobs for people in their 40s. Jobs for people in their 40s, considered the prime working age, decreased by 162,000 last year. This was the largest drop in employment since 1991, marking 28 years, and the 49th consecutive month of decline. Employment for people in their 30s, also considered the core of economic activity, decreased by 53,000 compared to the previous year.

Additionally, among non-wage workers, the number of 'employers with employees,' which the Moon Jae-in administration has cited as evidence of 'improved quality of employment,' decreased by 114,000 annually, while 'employers without employees' who run their businesses alone increased by 81,000.

The government is paying close attention to this situation and plans to announce measures for jobs for people in their 40s in the manufacturing sector in March. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said regarding the 162,000 decrease in employment for people in their 40s last year, "Based on an analysis equivalent to a full survey of retirees and job seekers, we will prepare a tailored comprehensive plan by March."

However, this year, with employment indicators recovering last year, it is difficult to expect a base effect, and considering factors such as the decline in the working-age population, it is unlikely that the employment upswing seen last year can be guaranteed. Eun Soon-hyun, Director of the Social Statistics Bureau at Statistics Korea, said, "It is difficult to mention the base effect when explaining this year's employment indicators, and we must also consider the decrease in the working-age population aged 15 to 64 since 2018. However, the government's commitment to job programs this year is a positive factor for employment indicators."

Experts say that such structural improvements in indicators are not welcome and call for the government to prepare fundamental measures. Professor Kim Dong-won of Korea University’s Business School said, "Jobs for people aged 60 and over, which the government likely created artificially, may disappear when the administration changes and are unlikely to contribute significantly to real economic growth in terms of goods or service production. Conversely, the decline in jobs for people in their 40s, a barometer of the economy and household conditions, is very concerning."

Professor Kim added, "Fundamentally, jobs should be created by companies (the private sector). Government policies that encourage corporate willingness to invest in employment can be a fundamental solution."

This content was produced with the assistance of AI translation services.