Last Month's Job-Seeking Benefits Near 1.2 Trillion Won... Manufacturing Workers Decrease by 65,000

July Labor Market Trends... Continued Impact of COVID-19
Unemployment Benefits Exceed 1 Trillion Won for Three Consecutive Months... Another Record High
Manufacturing Industry Employment Insurance Subscribers Decline for 11 Consecutive Months

On the 10th, a citizen is waiting to apply for unemployment benefits at the Seoul Employment Welfare Plus Center in Jung-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Bo-kyung] Last month, the unemployment crisis caused by the aftermath of the novel coronavirus infection (COVID-19) continued. The amount of unemployment benefits (job-seeking benefits) paid exceeded 1 trillion won for three consecutive months starting in May, setting new records every month.

According to the "July Labor Market Trends" announced by the Ministry of Employment and Labor on the 10th, the amount of job-seeking benefits paid last month was 1.1885 trillion won, an increase of 429.6 billion won (56.6%) compared to the same month last year. After surpassing 1 trillion won for the first time in May (1.0162 trillion won), more than 1 trillion won has been paid for three consecutive months.

Job-seeking benefits are allowances paid from the employment insurance fund by the government to support the job-seeking activities of unemployed individuals. They account for the majority of unemployment benefits and are commonly referred to as unemployment benefits. The amount of job-seeking benefits paid has been breaking records since the beginning of this year when the spread of COVID-19 intensified.

The number of new applicants for job-seeking benefits last month was 114,000, an increase of 13,000 (12.9%) compared to the same month last year. This is larger than the numbers in May (111,000) and June (106,000). The number of recipients of job-seeking benefits last month reached 731,000, setting a record high.

The number of employment insurance subscribers last month was 13.908 million, an increase of 185,000 compared to the same month last year. By age group, those aged 40 and above increased, but the youth groups aged 29 and below (-71,000) and those in their 30s (-56,000) decreased.

An official from the Ministry of Employment and Labor said, "Since local infections of COVID-19 are continuing and it is difficult to say that the situation is calming down globally, it is believed that companies are reducing hiring."

By gender, the number of male employment insurance subscribers increased by 48,000, and females by 137,000. By industry, the service sector increased by 237,000, but manufacturing decreased by 65,000.

In particular, employment insurance subscribers in the manufacturing sector, which plays a key role in supporting the economy, have decreased for 11 consecutive months. The decline has been increasing monthly, with May (-54,000), June (-59,000), and July (-65,000).

Within manufacturing, the electronics and telecommunications (-13,400) and automobile (-10,500) sectors saw significant decreases. The electronics and telecommunications sector was affected by the relocation of production lines overseas and restructuring, while the automobile sector was impacted by poor overseas sales and reduced production due to COVID-19.

The number of employment insurance subscribers in the service sector increased by 239,000 compared to July last year. The expansion of government job projects led to increases in public administration (43,300) and health and welfare (109,000), but wholesale (-8,500), accommodation (-5,900), and arts and sports (-1,900) sectors are still facing difficulties due to the impact of COVID-19.

Lee Jae-gap, Minister of Employment and Labor, stated at the Employment and Labor Crisis Response TF meeting that "The number of insured persons in manufacturing continues to decline, especially in automobile parts," and "Within the service sector, transportation and tourism-related industries are experiencing prolonged difficulties in employment due to decreased sales."

He added, "Careful and focused support is needed to stabilize employment in these vulnerable sectors."

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