Increase in Employment Insurance Subscribers Exceeds 100,000 for Two Consecutive Months... 'First Wave' Level

On the 9th of last month, citizens were seen receiving consultations for unemployment benefits applications and employment support at the Seoul Employment Welfare Plus Center in Jung-gu, Seoul. This day was the day after the announcement that 212,000 people newly applied for job-seeking (unemployment) benefits in January. It was the first time that the number of unemployment benefit applicants exceeded 200,000 in a month since January. At that time, the increase in employment insurance subscribers had dropped to the lowest level in 17 years. Photo by Moon Honam munonam@

[Sejong=Asia Economy Reporter Moon Chaeseok] Due to the impact of the third wave of COVID-19 in South Korea, the increase in employment insurance subscribers dropped to the 100,000 range for two consecutive months from January to February this year. This is the first time since the three consecutive months of 100,000 increases recorded from May to July last year, right after the first wave. Since employment indicators tend to lag behind the economy, there are expectations that the poor employment insurance figures may continue if labor market trends from December last year to January this year, during the third wave, are reflected.

According to the labor market trends announced by the Ministry of Employment and Labor on the 15th, the number of employment insurance subscribers last month was 13,991,000, an increase of 191,000 compared to the same month last year. Following January’s increase of 151,000, the lowest in 17 years since the 2004 credit card crisis, the increase remained in the 100,000 range for two consecutive months. This is the first time since the three consecutive months of 100,000 increases from May to July last year, after the first wave of COVID-19.

The number of job-seeking (unemployment) benefit applicants was 110,000, half of January’s 212,000. Applications were mainly from manufacturing (17,000), construction (16,000), wholesale and retail (12,000), and health and welfare (10,000) sectors.

Although the increase in employment insurance subscribers slightly rose compared to January and the number of beneficiaries decreased, debates over the possibility of depletion of the employment insurance fund and consequent premium hikes are expected to continue. Particularly, the payment of job-seeking benefits last year reached a record high of 11.8507 trillion won, which is a burden. Earlier, on the 3rd of last month, the Ministry of Employment and Labor announced in its annual work plan that discussions on raising the current 1.6% employment insurance premium rate would begin. However, on the 24th of the same month, Minister Lee Jae-gap of the Ministry of Employment and Labor drew a line by stating, "There is no immediate need to raise employment insurance premiums," and "We need to decide the timing of the increase while monitoring the economic situation."

The labor market trends announced monthly by the Ministry of Employment and Labor are based on surveys of regular and temporary workers among employment insurance subscribers. Special employment workers, freelancers, self-employed, and ultra-short-time workers are excluded.

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