COVID-19-Induced Employment Shock Materializes... 'March Employment' Worst Since Financial Crisis (Comprehensive)

Unemployment benefit applicants are entering the Western Employment Welfare Plus Center in Mapo-gu, Seoul.

[Asia Economy Reporter Kwangho Lee] Job indicators have plummeted to the worst levels since the global financial crisis due to the impact of the novel coronavirus infection (COVID-19). The implementation of strong 'social distancing' measures to prevent COVID-19 infections has concentrated damage on wholesale and retail, accommodation and food services, as well as small-scale service industries and self-employed workers with many low-income earners, and part-time workers. The government plans to announce a 'Employment Stability Policy Response Package' early next week to normalize the employment market.

According to the 'March Employment Trends' released by Statistics Korea on the 17th, the number of employed persons in March was 26,609,000, a decrease of 195,000 compared to the same month last year. This is the first time in 10 years and 10 months since May 2009, during the global financial crisis, that the increase in the number of employed persons has shown a negative (-) figure, with a decrease of 240,000.

Eun Soonhyun, Director of the Social Statistics Bureau at Statistics Korea, explained, "Temporary leave is occurring not only in government jobs but also across all sectors such as aviation and educational services," adding, "The impact of COVID-19 appeared mainly in wholesale and retail, food and accommodation industries, which involve a lot of face-to-face contact."

By industry, there were notable decreases in wholesale and retail (-168,000 persons, -4.6%), accommodation and food services (-109,000 persons, -4.9%), and educational services (-100,000 persons, -5.4%), which involve many consumer-facing roles. The number of self-employed persons also decreased by 62,000 (including unpaid family workers). In particular, self-employed individuals facing management difficulties laid off part-time workers, causing a sharp decline of 122,000 in self-employed persons with employees.

On the other hand, agriculture, forestry, and fisheries (134,000 persons, 10.6%) and health and social welfare services (82,000 persons, 3.7%) increased. Due to the spread of social distancing campaigns, parcel delivery usage increased, leading to growth in transportation and warehousing (71,000 persons, 5.0%).

The employment rate for ages 15-64, based on the OECD standard, was 65.4%, down 0.8 percentage points from the same month last year. This is the lowest March figure since March 2016 (65.2%).

The unemployment rate was 4.2%, down 0.1 percentage points from the same month last year. The youth unemployment rate for ages 15-29 was 9.9%, a decrease of 0.9 percentage points.

The number of unemployed persons was 1.18 million, a decrease of 17,000 compared to March last year. By gender, the number of unemployed men was 662,000, down 48,000 (-6.7%) from the same month last year, while unemployed women numbered 517,000, an increase of 31,000 (6.3%).

The expanded unemployment rate (Employment Supplementary Indicator 3), which reflects the actual experience of job seekers, reached 14.4%, the highest since statistics began in 2015. The youth expanded unemployment rate also hit a record high at 26.6%.

By age group, employment decreased in all age groups except those in their 60s. Employment in the 60s increased by 336,000, but decreased by 176,000 in their 20s, 120,000 in their 40s, 108,000 in their 30s, and 75,000 in their 50s.

The economically inactive population in March was 16,923,000, an increase of 516,000 (3.1%) compared to the same month last year. Looking at changes in the economically inactive population by activity status compared to March last year, increases were seen in those resting (366,000 persons, 18.3%) and those engaged in household duties (76,000 persons, 1.3%). Among the economically inactive population, the resting population increased in the 20s (109,000 persons, 35.8%), 60s (95,000 persons, 11.2%), 50s (66,000 persons, 16.4%), and 40s (60,000 persons, 29.0%). The number of discouraged job seekers among the economically inactive population was 582,000, an increase of 44,000 compared to the same month last year.

Hong Namki, Deputy Prime Minister and Minister of Economy and Finance, held a meeting with related ministers at the Government Seoul Office on the same day and stated, "We plan to finalize and announce early next week a package of employment stability policy responses, which includes employment retention measures, unemployment measures, emergency job creation and new job creation measures, and livelihood stabilization measures for workers in blind spots, to overcome the employment shock caused by COVID-19 through close consultation among related ministries."

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