Job-Seeking Benefits Surpass 1 Trillion Due to COVID-19...Manufacturing Workers Decrease by 54,000

Unemployment benefit applicants are receiving explanations from officials at the Seoul Employment Welfare Plus Center unemployment benefit briefing session in Jung-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Bo-kyung] Due to the spread of unemployment caused by the COVID-19 pandemic, the amount of job-seeking benefits paid last month exceeded 1 trillion won for the first time.

According to the "May Labor Market Trends" announced by the Ministry of Employment and Labor on the 8th, the amount of job-seeking benefits paid last month was 1.0162 trillion won, a 33.9% increase compared to the same month last year (758.7 billion won).

Job-seeking benefits are allowances paid from the employment insurance fund to unemployed individuals who are actively seeking jobs, accounting for the majority of unemployment benefits. This is the first time since the introduction of the employment insurance system in 1995 that the monthly payment amount has exceeded 1 trillion won.

The sharp increase in job-seeking benefit payments is due to the rise in unemployment caused by the COVID-19 pandemic. The number of new applicants for job-seeking benefits last month was 111,000, a 32.1% increase compared to 84,000 in the same month last year. The number of recipients increased by 34.8% to 678,000, which is also the largest ever recorded.

The number of employment insurance subscribers last month was 13.82 million, an increase of 155,000 (1.1%) compared to the same month last year.

Compared to the employment shock caused by COVID-19, where the increase in employment insurance subscribers sharply dropped from 376,000 in February to 253,000 in March and 163,000 in April, the trend showed some signs of stabilization.

The number of employment insurance subscribers in the service sector last month was 9.437 million, an increase of 194,000 (2.1%) compared to the same month last year. The increase was larger than in April (192,000).

Among the service sectors, the most notable increase in employment insurance subscribers was in public administration (43,000). This was analyzed as a result of the government job projects, which had been delayed due to COVID-19, resuming mainly with non-face-to-face and outdoor work. The number of subscribers in the health and welfare sector also increased by 100,000.

The distribution of emergency disaster relief funds starting from the 11th of last month and the gradual reopening of schools are also believed to have contributed to mitigating the employment shock in the service sector.

However, the increase in employment insurance subscribers in the wholesale and retail trade sector was limited to 8,000, shrinking compared to April (14,000), and the number of subscribers in the accommodation and food service sector decreased by 3,000, turning negative. The business services sector, including travel agencies, also decreased by 26,000. These industries were directly hit by the avoidance of face-to-face contact and social distancing measures due to COVID-19.

The number of employment insurance subscribers in the manufacturing sector, the backbone of the domestic industry, was 3.529 million, a decrease of 54,000 (1.5%) compared to the same month last year. The decrease was larger than in April (40,000). Subscribers in the key industries of electronics and telecommunications and automobile sectors decreased by 12,000 and 9,000 respectively, increasing the decline. This was analyzed as a result of the contraction in production, consumption, and exports caused by COVID-19.

By age group, employment insurance subscribers increased by 32,000 and 106,000 in their 40s and 50s respectively, and by 141,000 for those aged 60 and above, but decreased by 63,000 and 62,000 for those under 29 and in their 30s respectively. This is attributed to the closure of employment opportunities for youth due to companies reducing or postponing new hires.

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