Employment Impacted by COVID Resurgence... Critical Juncture in July-August

Employment Fluctuations Likely Following Quarantine Policies
Job Seeking Activity Sharply Rigid in March-April Last Year
Recent Report by Employment Information Service
Youth, Manufacturing, and Service Regular Workers
Approximately 140,000 Decrease Compared to Previous Year

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Moon Chaeseok] As the number of new COVID-19 cases surged to the 700s per day, employment authorities have also gone on high alert. There are concerns that if social distancing measures are strengthened, an employment crisis similar to last year could once again hit vulnerable groups. The government is closely monitoring trends, expecting the spread of COVID-19 to be reflected in this month's employment indicators. In particular, the forecast of a 250,000 increase in employed persons in this year's second half economic policy direction is now facing doubts about its feasibility.

An official from the Ministry of Employment and Labor said on the 5th, "The spread of COVID-19 is serious," adding, "If this trend continues until next month, it could affect the employment trends for July, which will be announced in August," and "There is concern that the increase in employed persons may slow down, so we are paying close attention to meetings of the Central Disaster and Safety Countermeasures Headquarters and the Central Disease Control Headquarters."

The employment authorities' concerns about the spread of COVID-19 stem from last year's experience. According to a recent report titled ‘Analysis of the Impact of COVID-19 on Vulnerable Groups in the Labor Market’ released by the Korea Employment Information Service, the number of job openings in companies in the first half of last year was 793,000, down 32,000 (-3.9%) compared to the same period the previous year, and the number of hires also decreased by 14,000 (-1.9%) to 734,000.

Especially among youth, traces of the direct impact of COVID-19 appeared in many places. Relatively stable regular positions decreased, while unstable contract positions increased. Looking at the trend of employment insurance subscribers among youth (ages 19-29) from February to September over the past four years, in 2020, regular manufacturing jobs decreased by 27,200 and regular service jobs by 112,700 compared to the same period the previous year, whereas manufacturing contract jobs increased by 1,500 and service contract jobs by 17,000.

Kim Yubin, head of trend analysis at the Korea Labor Institute, said, "The only confirmed fact currently is that there are many young people among the confirmed cases (including those infected with the Delta variant)," but added, "If a sharp decline in employed persons similar to early last year, December, and January of this year occurs due to virus spread, vulnerable employment groups such as youth, women, and temporary daily workers will be relatively more severely affected." In April last year, the number of employed persons decreased by 476,000 compared to the same month the previous year, and in December of the same year, by 628,000.

Even if the virus spread worsens and quarantine guidelines are strengthened, the options available to authorities are very limited. Even without cash support policies, considerable financial resources must be invested to stabilize the Ministry of Employment and Labor’s core projects such as the nationwide employment insurance system and the expanded application of the 52-hour workweek. This has been criticized for reducing the capacity of private companies to create jobs.

Since it is difficult to create new policies while maintaining the ministry’s core projects, there are growing concerns inside and outside the government that the direction will inevitably flow toward producing jobs through fiscal support again. Given the serious concerns about the depletion of the employment insurance fund, if such fiscal policies continue, criticism is expected to increase.

An official from the Ministry of Employment and Labor said, "We have already implemented measures such as the extension of special employment support for industries affected by employment retention subsidies," and added, "If the virus spread becomes severe, we will consider various options, including adjusting the scope of employment creation-related subsidies such as employment retention subsidies and special youth hiring incentives that have been in place since last year."

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