Employment Contracted Throughout the Year... Longest Since IMF Crisis (Comprehensive Report 2)

February Trends: Employment Decreased by 473,000
Highest Ever Expansion Unemployment Rate Since Statistics Began

[Asia Economy Reporters Kim Hyunjung and Jang Sehee] The employment market has been shrinking for 12 consecutive months since March last year, when the COVID-19 pandemic spread. This is the longest period since the 1998 International Monetary Fund (IMF) financial crisis. The government's public job supply and large-scale subsidy projects have proven insufficient to prevent the employment cliff. The expanded unemployment rate (Employment Supplementary Indicator 3), which includes employed persons willing to work, reached 15.7%, the highest since statistics began in 2015.

According to the 'February Employment Trends' released by Statistics Korea on the 17th, the number of employed persons last month was 26,365,000, a decrease of 473,000 compared to a year earlier. This marks 12 consecutive months of decline since the surge in COVID-19 cases in March last year. It is the longest decline since the IMF financial crisis (January 1998 to April 1999, 16 months). However, due to the impact of strict social distancing, the base effect of last year's employment boom, and the gap in public jobs during the year-end and New Year holidays, the number of employed persons improved compared to January, when it decreased by 982,000 year-on-year. Jung Dongmyung, Director of the Social Statistics Bureau at Statistics Korea, explained, "During the February employment survey period, social distancing was eased on the 15th, and public job projects also started, which is likely reflected in the data."

◆Poor Employment in Face-to-Face Sectors... Only Those in Their 60s Increased by 210,000 Across All Age Groups= By industry, face-to-face sectors such as accommodation and food services (-232,000), wholesale and retail trade (-194,000), and associations, repair, and other personal services (-84,000) decreased, while health and social welfare services (91,000) and public administration, defense, and social security administration (38,000) increased.

By age group, employment decreased in all age groups except those aged 60 and over (210,000). The employment rate for those aged 15 and over fell by 1.4 percentage points year-on-year to 58.6%, the lowest since May 2013 (57.5%). The number of unemployed increased by 201,000 compared to the same month last year, reaching 1,353,000, and the unemployment rate rose by 0.8 percentage points to 4.9%.

◆Employment Market Losing Momentum... February Temporary Leave at Record High= All indicators reflecting employment market vitality have plummeted. Temporary leave workers, who are classified as employed but are unable to return to work after six months and are then classified as unemployed, numbered 698,000, an increase of 80,000 year-on-year. Although lower than January (892,000), this is the highest number recorded for February since statistics began in July 1982. The economically inactive population was 17,269,000, an increase of 562,000 compared to the same month last year, with 'discouraged job seekers' increasing by 218,000 to 752,000. Notably, the Employment Supplementary Indicator 3 (expanded unemployment rate), which includes employed persons who believe they can work more, rose by 3.5 percentage points year-on-year to 15.7%, the highest since statistics began in 2015.

Hong Namki, Deputy Prime Minister and Minister of Economy and Finance, focused on the reduced decline in the number of employed persons compared to the previous month and forecasted improvement in next month's indicators. Deputy Prime Minister Hong stated, "The difficulties in the employment market caused by the third wave of COVID-19 have noticeably eased," and predicted, "Considering the easing of social distancing, continued export improvement, and the base effect from the employment shock in March last year, employment indicators are expected to improve in March as well." He emphasized, "However, since the number of COVID-19 confirmed cases remains at the 300-400 range and the risk of infection continues, the government will maintain vigilance in quarantine measures and make policy efforts to ensure the employment market and job situation improve more rapidly."

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