Economic Recovery After COVID-19? Growing Concerns Over 'Jobless Growth'

End of COVID-19 → Economic Recovery → Employment Increase
Concerns Rise Over Potential Government Premise Mismatch
Sojusung Special Committee Forum and National Assembly Scheduled Report, etc.

On the 15th, citizens attending the '4th Pangyo Autonomous Driving Mobility Show' held at Pangyo 1st Technovalley in Bundang-gu, Seongnam-si, Gyeonggi Province, are experiencing the autonomous serving robot by Exarobotics, which is being demonstrated at a nearby restaurant. This event, held until the 17th, showcases autonomous mobility technologies and products such as autonomous vehicles, drones, and robots that can be applied to contactless services, which have recently gained attention due to COVID-19. Photo by Kim Hyun-min kimhyun81@

[Sejong=Asia Economy Reporter Moon Chaeseok] The polarization of the labor market between regular and irregular workers, the spread of automation due to unmanned stores and contactless e-commerce leading to labor cost savings, companies increasing irregular hiring over regular public recruitment, and the rise of N-jobbers (those with two or more jobs) trying to prepare for the future by having side jobs.

Due to these changes in the labor market, concerns are growing that even after achieving herd immunity against COVID-19 and economic recovery, growth without employment will continue. At a special committee forum that proposed the 'income-led growth' theory?where increased income for low-income groups through the government's expansionary fiscal policy leads to increased employment and revitalized domestic demand?there was a forecast that "employment-less recovery may occur after the end of COVID-19." This raises questions about whether medium- to long-term increases in regular employment will occur even if the economy recovers.

At the 'Employment and Wage Trends and Challenges during Four Years of the Moon Jae-in Government' forum held by the Income-Led Growth Special Committee on the 28th of last month at Post Tower in Jung-gu, Seoul, voices calling for preparation against 'employment-less recovery' were strong. Professor Hwang Seon-woong of Pukyong National University, who presented at the forum, diagnosed, "With the acceleration of automation due to COVID-19, there is a concern that employment-less recovery may appear after the COVID-19 crisis." He added, "South Korea is experiencing the fastest population aging and industrial robot diffusion among major advanced countries," and "concerns about employment and wage stagnation and job polarization caused by this are increasing."

Lee Si-gyun, Center Director of the Korea Employment Information Service and a discussant, said, "With the spread of the contactless economy due to the COVID-19 crisis, the share of digital commerce in total retail sales increased by more than 10 percentage points last year," and "even if COVID-19 is overcome, the possibility of continued restructuring in wholesale and retail industries is high, so policy considerations for this area are necessary." Kim Yong-gi, Vice Chairman of the Jobs Committee, stated, "Employment-friendly research and development (R&D) and tax policies are fundamental solutions to reverse the trend of employment-less recovery or growth."

Amid calls at the Income-Led Growth Special Committee forum to propose employment-friendly policies, the National Assembly Budget Office pointed out that government policies are excessively focused on the official unemployment rate, creating a 'policy blind spot.' Policies are needed for 'expanded unemployed' who are not classified as official unemployed due to changes in job types, but such policies are insufficient.

According to the report titled 'Employment Situation of Youth Aged 15-29 after COVID-19 Examined through Employment Auxiliary Indicators' published in the April issue of Economic and Industrial Trends & Issues by the National Assembly Budget Office on the 29th of last month, the gap between the youth expanded unemployment rate and the official unemployment rate by Statistics Korea widened from 13.3 percentage points in 2018 to 17.2 percentage points in January-February this year.

Statistics Korea classifies "those who did not work during the survey week but have sought work in the past four weeks and are available to work if a job is offered" as official unemployed. However, since the number of potential economically active population who have the conditions or willingness to work more beyond the official unemployed is increasing rapidly, policies focused solely on the official unemployment rate inevitably create a blind spot. Yu Geun-sik, Economic Analyst at the Budget Office, said, "The unemployment rate perceived by youth is rising rapidly after COVID-19," and urged, "The government should analyze in detail the causes of the widening gap between the official and expanded unemployment rates among youth after COVID-19."

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