Reasons for the Largest Increase in Unemployment Since the Foreign Exchange Crisis

On the 10th, unemployment benefit applicants are receiving explanations from officials at the Seoul Employment Welfare Plus Center in Jung-gu, Seoul. Photo by Mo Honam munonam@

[Asia Economy Reporter Jusangdon Joo] Due to the impact of the novel coronavirus infection (COVID-19), the number of unemployed people and the unemployment rate last month reached the worst levels on record.

According to Statistics Korea on the 14th, the number of unemployed people last month was 1,278,000, an increase of 133,000 (11.6%) compared to the same month last year, and the unemployment rate was 4.5%, up 0.5 percentage points. Both figures are the highest since related statistics began in 1999.

The number of unemployed people increased significantly as those who had given up job searching resumed their job-seeking activities. At 1,278,000, it surged by 133,000 (11.6%) compared to the same month last year. Since the change in related statistical standards in June 1999, this is the highest level for May since May 2000. The unemployment rate rose to 4.5%, up 0.5 percentage points from the same month last year.

The number of employed persons aged 15 and over was 26.93 million, a decrease of 392,000 (-1.4%) compared to the same month last year. This is the first time in over three months that the number of new employed persons has decreased continuously since the aftermath of the International Monetary Fund (IMF) foreign exchange crisis, which saw a four-month consecutive decline from October 2009 to January 2010.

All age groups except those aged 60 and over experienced a decline in employment. While those aged 60 and over increased by 302,000, the decreases were recorded as follows: ▲40s -187,000 ▲30s -183,000 ▲50s -140,000 ▲20s -134,000.

By industry, increases were seen in health and social welfare services (131,000; 6.0%), agriculture, forestry, and fisheries (54,000; 3.6%), and transportation and warehousing (50,000; 3.5%), while decreases occurred in wholesale and retail trade (-189,000; -5.1%), accommodation and food services (-183,000; -7.9%), and associations, repair, and other personal services (-86,000; -6.8%). In particular, manufacturing employment decreased by 57,000, continuing a three-month consecutive decline starting from March this year (-22,000).

Jung Dongwook, head of the Employment Statistics Division at Statistics Korea, stated, "With the transition from social distancing to everyday distancing on May 6, the decline in face-to-face sectors such as retail and accommodation/food services has lessened, reducing the overall employment decrease compared to April (-476,000). Going forward, the trend of COVID-19 confirmed cases and the manufacturing sector situation will influence the overall employment decline."

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