[The Editors' Verdict] The 'Employment Paradigm' Must Change

Professor Sangbong Kim, Department of Economics, Hansung University

The employment market is reportedly improving significantly. According to the January employment statistics, the economically active population increased by 708,000. Among them, the number of employed people rose by 1,135,000, while the number of unemployed decreased by 427,000. The employment rate for those aged 15 to 64, based on the Organization for Economic Cooperation and Development (OECD) standards, was 67%, up 2.7 percentage points compared to the same month last year. The increase in employment is the largest in 21 years and 10 months since March 2000, when the economy was recovering from the foreign exchange crisis, with an increase of 1,211,000. By age group, employment increased by 522,000 for those aged 60 and over, 273,000 for those in their 20s, and 245,000 for those in their 50s. In terms of the number of employed people alone, this can be considered a record-breaking increase.

However, not many people feel this increase in employment. This is because the perceived unemployment rate has not kept pace. One reason is the base effect. Although the economically active population increased by 708,000 compared to January 2021, it had decreased by 982,000 in January 2020, just before the COVID-19 pandemic. Employment increased by an average of 316,000 annually in 2017, 97,000 in 2018, and 301,000 in 2019, but decreased by 218,000 in 2020 when the pandemic began. In other words, the base effect is quite significant, indicating that the level has not yet recovered to the pre-COVID-19 period.

Along with the base effect, the increase in employed people by age group and industry has not necessarily created quality jobs. Recently, the number of employed people in their 50s and 60s has continued to rise, and in January as well, employment in these age groups increased by 767,000. Many of these employed individuals do not have full-time jobs of 40 hours or more per week created by government-funded job programs. The Full-Time Equivalent (FTE) method counts one employed person as someone working 40 hours per week, 0.5 for someone working 20 hours, and 1.5 for someone working over 60 hours. Such regular jobs have decreased by about 1 million compared to before COVID-19. Additionally, there has been a significant increase in employment in health and social welfare services as well as public administration and social security sectors.

COVID-19 has changed many things and is threatening quality jobs. As many industries transition to digital, presidential candidates are proposing various labor market policies. These include the labor director system, time-off systems for public servant and teacher unions, the Serious Accident Punishment Act, a four-day workweek, the 52-hour workweek system, improvements in treatment for non-regular and platform workers, job control towers, and regional job creation, among others. While these policies are important, the priority should be on how to create and provide quality jobs in industries. There are still almost no industry-specific job or labor policies.

Due to skyrocketing real estate prices, many people cannot afford to buy a home with just their salary. This surge in housing prices makes it difficult to create proper jobs. The rapid rise in real estate prices devalues currency. Many people think, "It's an era where money should work, not the body," shifting from labor to asset markets such as virtual assets. Many have abandoned the idea of growing assets through salary and now use their wages merely for living expenses. The era of high growth is over, and with a declining population, new job policies, labor policies, and industrial policies must provide quality jobs.

Kim Sang-bong, Professor of Economics, Hansung University

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