Why New Employment Increased by 490,000 Despite COVID-19... 'Statistical Illusion'

Record High of 570,000 Employed Aged 60 and Over
Temporary Leave Workers on Leave While Employed Also See Largest Increase in 10 Years
"Current Employment Market Situation Not Properly Reflected," Criticism Raised

[Image source=Yonhap News]

[Sejong=Asia Economy Reporters Kim Hyunjung and Joo Sangdon] Despite the spread of the novel coronavirus infection (COVID-19), the continued employment growth in February this year is pointed out to be merely a statistical 'illusion.' Although the number of new employed persons increased by nearly 500,000, making it appear as if employment is still actively occurring, most of the increase consists of jobs for seniors aged 60 and over created through government funding, and the number of temporarily furloughed workers who are not actually working has also surged. Critics argue that when related statistics fail to clearly reflect market conditions, it becomes difficult to prepare timely employment measures in response to COVID-19.

◆ Despite COVID-19, record high new employment among vulnerable seniors aged 60 and over = The most notable figure in the February employment trends announced by Statistics Korea on the 11th is the number of new employed persons aged 60 and over. In this age group alone, 570,000 people found new jobs last month. Among them, those aged 65 and over accounted for 386,000, exceeding the number of employed persons in their 30s during the same period (19,000) by 20 times. The increase in employed persons aged 60 and 65 and over are the highest since records began in 1982 and separate records started in 1989, respectively. Paradoxically, during the period when COVID-19 rapidly spread, the most vulnerable elderly population found an unprecedented number of jobs.

It is also difficult to assume that all of these individuals were actually working and earning income as of February. The number of temporarily furloughed workers increased by 142,000 compared to the previous year, and Statistics Korea reports that a significant portion of the newly employed seniors aged 60 and over includes those who temporarily stopped working due to COVID-19. Temporarily furloughed workers include unpaid leave workers who have no income. This number had decreased by 29,000 compared to the previous year in January but suddenly rose to the highest level in 10 years last month. This indicates that COVID-19 was a decisive factor.

Moreover, senior jobs are artificially created by the government using tax funds, focusing more on securing stable income for this age group rather than productivity. If the number of these jobs offsets the decrease in new employment among teenagers (-25,000), people in their 20s (-25,000), and those in their 40s (-104,000), it is practically difficult to say that the employment statistics released amid the COVID-19 crisis accurately reflect the market.

◆ Limitations in reflecting market conditions... employed persons without income = Statistics Korea expects that the impact of COVID-19 will be more pronounced in the March employment indicators, as confirmed cases sharply increased from the 20th of last month. However, if existing employees do not resign due to reasons such as dismissal but instead switch to furlough status, they are counted as employed persons under temporarily furloughed workers, not as unemployed. This means that if the situation prolongs for more than five months and these workers ultimately fail to return to work, their employment insecurity may not be properly reflected in Statistics Korea's survey results.

However, Statistics Korea maintains that it is difficult to produce separate employment rate statistics excluding temporarily furloughed workers because the group includes both paid furloughed workers in the private sector. There are no plans to distinguish unpaid furloughed workers from paid ones or to present separate statistics.

The problem arises when statistics fail to timely reflect reality, causing market distortions. Experts point out that the greater the gap between actual market conditions and statistics, the harder it becomes to prepare systematic government employment measures in response to COVID-19 in a timely manner. Last month, when employment growth was observed for the seventh consecutive month, the number of self-employed persons with employees decreased by 145,000, marking the ninth consecutive month of reducing employees by over 100,000 or closing stores.

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