Employment Drops by 980,000... Worst Since the Foreign Exchange Crisis (Comprehensive)

Statistics Korea 'January Employment Trends'
11 Consecutive Months of Decline Since March Last Year
Job-Creation Government's Efforts Undermined
1.57 Million Unemployed, Largest Increase in 20 Years

[Sejong=Asia Economy Reporter Moon Chaeseok] Last month, the number of employed people sharply declined by nearly one million, falling back to the level before the Moon Jae-in administration took office. This is the largest decrease since the 1998 International Monetary Fund (IMF) financial crisis. Although the government, which prioritized job creation as its top task, poured massive resources into various public job projects and employment retention support, it ultimately could not avoid the prolonged impact of COVID-19. The title of "Job Government" has become meaningless.

According to the "January 2021 Employment Trends" released by Statistics Korea on the 10th, the number of employed people last month was 25,818,000, a decrease of 982,000 (3.7%) compared to the previous year. This is the largest decline in 22 years since December 1998, when 1,283,000 jobs were lost during the IMF financial crisis. The number of employed people has decreased for 11 consecutive months since March last year when the COVID-19 pandemic spread, marking the longest period since the financial crisis (January 1998 to April 1999, 16 months).

The total number of employed people fell below 25 million for the first time since the Moon Jae-in administration took office. Since taking power in 2017, the government had installed a job situation board at the Blue House and raised the banner of a "Job Government," but the employment reality has regressed to the era of the Park Geun-hye administration.

By industry, the accommodation and food service sector, which involves many face-to-face contacts and was hit hard by COVID-19, saw the largest impact with a decrease of 367,000 employed people. The wholesale and retail trade sector lost 218,000 jobs. On the other hand, the transportation and warehousing sector, including delivery and logistics, increased by 30,000 jobs, and employment in business facility management, business support, and rental services rose by 27,000. Public administration, defense, and social security administration, which includes public jobs, also increased by 20,000.

The number of employed elderly people, who had supported employment indicators, also declined for the first time in 10 years. In January, the number of employed people aged 60 and over decreased by 15,000 compared to the same month last year. This is the first decline since February 2010, shortly after the global financial crisis, when 40,000 jobs were lost. As a result, employment decreased simultaneously across all age groups.

The number of unemployed people is also steadily increasing. In January, the number of unemployed was 1.57 million, an increase of 417,000 (36.2%) compared to the same month last year. This increase is the largest in 20 years since June 2000. The unemployment rate rose by 1.6 percentage points to 5.7% during the same period. The employment auxiliary indicator 3 (expanded unemployment rate), which reflects the perceived unemployment rate, rose by 4.7 percentage points to 16.8% compared to the previous year. In particular, the expanded unemployment rate for the youth (ages 15-29) increased by 5.8 percentage points to 27.2%.

Job-seeking activity is also rapidly declining. Last month, the economically inactive population was 17.58 million, an increase of 867,000 (5.2%) compared to the same month last year. Among the economically inactive population, those who did not seek jobs for reasons other than studying or household chores, called "resting" (379,000 people, 16.2%), increased across all age groups. Especially among young people in their 20s and 30s, the numbers increased by 105,000 (29.4%) and 71,000 (33.9%), respectively. The number of discouraged job seekers rose by 775,000, an increase of 233,000.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki indicated active measures by stating on his social media, "The government will prioritize alleviating difficulties in people’s livelihoods and rapid employment recovery as the top policy priority and will mobilize all possible policy means to respond."

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