[Exclusive] February Unemployment Benefits Exceed 800 Billion Won for the First Time... Government Measures Lag Behind

'COVID-19 Warning Signs' 808.3 Billion Recorded in February
Unemployment Rises Among 50s-60s, 4,400 Cases of Business Closure and Bankruptcy
Government to Announce Additional Measures Around March Employment Statistics Release
Budget 277.1 Billion, National Employment Support System 'Ineffective'

[Asia Economy Reporters Kim Hyunjung and Kim Bokyung] In February, unemployment benefit payments surpassed 800 billion won for the first time ever. With the full onset of the COVID-19 pandemic in March, unemployment benefit payments are expected to increase to around 1 trillion won. Although the industry has long demanded strong measures, the government only hurriedly began preparing additional countermeasures when the unemployment crisis was imminent.

According to employment insurance statistics on the 10th, unemployment benefit payments in February reached a record high of 808.3 billion won. This is the first time monthly unemployment benefit payments have exceeded 800 billion won. This represents a 28% increase compared to the same month last year (632.4 billion won). Unemployment benefits are a broader concept than job-seeking benefits. Specifically, the amount includes job-seeking benefits of 780.9 billion won, early reemployment allowances of 25.8 billion won, sickness benefits of 100 million won, and other various allowances and benefits supporting the unemployed.

The number of people newly receiving unemployment benefits in February reached 107,000. Among them, the most affected were middle-aged and older adults. By age group, those in their 50s were the largest at 27,000. Next were those aged 60 and above (22,000), 40s (20,000), 30s (19,000), and 20s (18,000). Examining the reasons for unemployment, resignations due to company recessions and restructuring numbered about 42,300, an increase of 7,100 compared to 35,200 in the same month last year. Those who lost jobs due to business closures or bankruptcies also reached about 4,400.

By industry, manufacturing had the highest number at 18,500, followed by construction at 16,500, business facility management and services at 12,400, and wholesale and retail trade at 12,000. By workplace size, the highest number was in businesses with fewer than five employees, which are financially vulnerable, at 24,800, but even large companies with over 1,000 employees had 13,200 unemployed. In fact, mass unemployment began to surge from February.

On the 10th, unemployment benefit applicants are receiving consultations at the Western Employment Welfare Plus Center in Mapo-gu, Seoul. Photo by Mun Honam munonam@

The February statistics are only a precursor. Next week, employment indicators for March, when the impact of COVID-19 on the labor market became full-scale, will be released. On the 13th, the Ministry of Employment and Labor will announce March unemployment benefit statistics, and on the 17th, Statistics Korea will release employment trends (economically active population survey) results. The number of job-seeking benefit applicants last month is estimated to be between 150,000 and 160,000. However, so far, the government has not presented any clear measures other than expanding employment retention subsidies paid to workplaces implementing paid leave or furloughs.

The safety net for groups outside the employment insurance system, such as special-type workers, platform workers, and small-scale self-employed individuals, remains even more insufficient. Although 277.1 billion won was secured this year to implement the National Employment Support System, known as the "Korean-style unemployment assistance," it became useless as related laws were not passed by the National Assembly.

The government plans to announce additional unemployment measures before and after the employment indicator updates. The Ministry of Employment and Labor, the responsible department, held a meeting with employment and labor experts for the first time only on the 9th to share ideas. Facing an unprecedented employment crisis, the timing of the announcement of measures has not yet been decided. A ministry official said, "Additional measures require budget negotiations with the Ministry of Strategy and Finance," adding, "We are reviewing various measures, including employment stabilization and employment measures for young people whose new hiring has decreased."

With new employment virtually halted, there are opinions that the government should "select and concentrate" to stabilize the lives of the unemployed. Joo Won, head of the Economic Research Office at Hyundai Research Institute, said, "Unemployed people from severely affected industries such as aviation and travel will soon appear in the statistics," emphasizing, "It is impossible to completely prevent worsening employment. Rather, measures to support the livelihoods of the unemployed are the most urgent. It is necessary to drastically increase the scope, duration, and amount of support."

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