Kim Yong-beom, Deputy Minister of Economy and Finance, "US and Germany Employment Shocks... Korea Also Needs Innovative Institutional Improvements"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] Kim Yong-beom, the 1st Vice Minister of Strategy and Finance, pointed out that major countries in the United States and Europe are experiencing employment shocks due to the novel coronavirus infection (COVID-19), and that Korea must also prepare by implementing innovative institutional improvements.

On the 2nd, Vice Minister Kim stated on Facebook, "Major countries in Europe and the United States are experiencing a similar scale of massive employment shocks," and emphasized, "It is time to quickly repair the institutional fortress in preparation for the impending employment shock."

He presented statistics showing that the number of unemployment benefit claims in the United States exceeded 30 million over six weeks, and that the number of applicants for Germany's short-time work scheme surged to 7.5 million. The U.S. unemployment benefit claims account for 18.4% of the economically active population, while in Germany, applicants represent 17% of the economically active population.

Germany's short-time work scheme is a system where, if business conditions worsen, working hours are reduced instead of layoffs, and the government compensates for the reduced wages. Although such an advanced system is in operation, he added that the number of unemployed in Germany also increased by 370,000.

Vice Minister Kim explained, "The institutional fortresses that countries have built up over a long period through the Great Depression and several economic crises are insufficient to withstand the COVID-19 tidal wave."

He continued, "Crises call for innovation and are also times for impossible grand compromises," urging that Korea must devise new measures to cope with the employment shock.

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