Last Year Employment Decreased by 218,000... Largest Drop in 22 Years Since the 1998 Financial Crisis (Comprehensive Report 2)

Statistics Korea Announces 'December 2020 and Annual Employment Trends'

The third round of disaster relief funds for small business owners and vulnerable employment groups affected by the third wave of the novel coronavirus infection (COVID-19) will be distributed starting today (the 11th). On this day, citizens are receiving related consultations at the Seoul Employment Welfare Plus Center in Jung-gu, Seoul. Photo by Moon Honam munonam@

[Sejong=Asia Economy reporters Kim Hyun-jung and Joo Sang-don] Last year, the number of employed persons sharply declined by 218,000 compared to the previous year, marking the largest decrease since the 1998 International Monetary Fund (IMF) foreign exchange crisis. The economic activities rapidly contracted due to the COVID-19 pandemic, leading companies to reduce hiring and freezing the employment market in certain sectors such as the service industry.

According to the 'December 2020 and Annual Employment Trends' released by Statistics Korea on the 13th, the number of employed persons last year was 26.904 million, down 218,000 (-0.8%) from the previous year. This is the first annual decrease in employed persons in 11 years since 2009 (a decrease of 87,000), and the largest drop in 22 years since the foreign exchange crisis in 1998 (a decrease of 1.276 million).

The annual decrease in employed persons compared to the previous year has occurred only five times, including the severe economic crises of ▲1984 Oil Shock (decrease of 76,000) ▲1998 Foreign Exchange Crisis (decrease of 1.276 million) ▲2003 Credit Card Crisis (decrease of 10,000) ▲2009 Global Financial Crisis (decrease of 87,000), and last year.

◆ Collapsed face-to-face sectors... Temporary and daily workers sharply decreased = During the same period, the number of unemployed persons was 1.108 million, an increase of 45,000 (4.2%) from 2019. The overall employment rate was 60.1%, down 0.8 percentage points from the previous year.

By industry, the largest decrease in employed persons was in wholesale and retail trade and accommodation and food services, down 319,000 (-5.3%) compared to the previous year, and manufacturing decreased by 53,000 (-1.2%). Construction also declined by 4,000 (-0.2%).

By employment status, temporary workers numbered 4.483 million, down 313,000 (-6.5%) from the previous year, and daily workers were 1.328 million, a sharp decrease of 101,000 (-7.1%). The scale of temporary workers is the largest decrease since statistics began in 1989, and the decrease in daily workers is the largest since 2012 when it fell by 127,000.

Self-employed persons with employees numbered 1.372 million, down 165,000 (-10.8%) from the previous year, the largest decline since 1998 (247,000). Unpaid family workers decreased by 35,000 (-3.3%) to 1.042 million. Regular employees increased by 305,000 (2.1%) to 14.521 million, while self-employed without employees ("solo bosses") increased by 90,000 (2.2%) to 4.159 million. The increase in regular employees was the smallest since 2005 (272,000).

The economically inactive population who are neither employed nor seeking jobs increased overall by 455,000, mainly due to increases in those resting (282,000, 13.5%) and doing household chores (154,000, 2.7%). The number of discouraged job seekers rose by 73,000 to 605,000 compared to the previous year.

◆ Employment trends worsened further in December due to COVID-19 resurgence = The most recent figures for December also showed a worsening trend in employment indicators.

The number of employed persons aged 15 and over in December was 26.526 million, down 628,000 (-2.3%) from the same month last year. This is the largest decrease since February 1999 (-658,000). The number of employed persons has decreased for 10 consecutive months since March last year, the longest period since the 16-month decline from January 1998 to April 1999 immediately after the foreign exchange crisis. The employment rate was 59.1%, down 1.7 percentage points from the same month last year. The employment rate itself is the lowest since December 2012 (58.6%), and the decline is the largest since February 1999 (-2.5 percentage points).

By age group, the number of employed persons increased by 249,000 among those aged 60 and over, but decreased by 254,000 in their 20s, 246,000 in their 30s, 183,000 in their 40s, and 147,000 in their 50s.

The number of temporarily absent workers also rose significantly. In December last year, it reached 745,000, an increase of 438,000 compared to the same month the previous year. During the same period, the number of unemployed persons was 1.135 million, up 194,000 (20.6%) from the same month last year. The unemployment rate rose by 0.7 percentage points to 4.1%.

The economically inactive population was 17.255 million, up 690,000 (4.2%) from the same month last year. Among them, those preparing for employment increased by 53,000 to 776,000, and discouraged job seekers increased by 191,000 to 725,000.

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