The Bank of Korea: "Employment in Major Countries to Improve Rapidly in the Short Term from Q2"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Although employment in major countries around the world has worsened compared to the financial crisis period, the Bank of Korea has forecasted that employment conditions will begin to improve rapidly for the time being as economic recovery accelerates from the second quarter.

On the 18th, the Bank of Korea stated in its Overseas Economic Focus report, "Although the current employment situation in major countries has recovered significantly since the resumption of economic activities, it remains worse than during the financial crisis. In particular, recently, employment improvement has somewhat stalled, corporate hiring plans are not active, labor market exits have expanded, and long-term unemployment and permanent layoffs have increased, raising concerns about the entrenchment of unemployment."

For major countries, it is expected that in the short term, employment conditions will improve relatively quickly from the second quarter of this year, supported by the normalization of the service sector. The Bank of Korea explained, "From the second quarter of this year, as vaccine distribution calms the COVID-19 crisis and economic recovery accelerates, employment will rapidly improve, especially in sectors that had been contracted. However, in Europe, as economic recovery takes hold, government employment support is likely to be reduced to improve fiscal soundness, so even if business conditions recover, companies are more likely to respond by increasing working hours rather than adding employment."

However, in the medium to long term, employment recovery may proceed moderately as employment expansion is continuously constrained by the contraction of small businesses, the expansion of large companies' market share, and behavioral changes such as telecommuting, automation, and the spread of online consumption.

The Bank of Korea emphasized that for employment to expand in the medium to long term, it is important to create new jobs suitable for the digital and automated economic structure (such as professional consulting, creative occupations, science, technology, and engineering) and to support related education and training opportunities for workers.

According to the Bank of Korea, although the number of employed persons in major countries has increased significantly since the resumption of economic activities, it remains at a worse level than during the financial crisis. The number of employed persons in major countries decreased by -7.8% in April last year (compared to the end of 2019) and narrowed to -3.1% in December, but still exceeds the decline level during the financial crisis (maximum -2.8%). Working hours, which had significantly decreased mainly in major European countries, have also recovered considerably but remain at a low level.

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