"Last Year's Perceived Economic Pain Index Recovers to Pre-Corona Levels"

Hankyungyeop Survey, Perceived Unemployment Rate Declines
"December 2023 at 12.5... Level Similar to December 2019's 12.0"
'Employment Quality' Drops... "Need to Increase Full-Time Jobs"

Last year, the 국민 (aged 15-69) Perceived Economic Hardship Index improved to the level of 2019, before the COVID-19 pandemic (global outbreak).

Job seekers participating in the '2023 Tourism Industry Job Fair' held at COEX in Gangnam-gu, Seoul on September 18 last year are looking at the recruitment board. Photo by Jinhyung Kang aymsdream@

On the 16th, the Korea Economic Association (Hangyeonghyeop) announced that last year’s 국민 Perceived Economic Hardship Index recorded 12.5. This recovered to the levels of 12.9 in 2018 and 12.0 in 2019, before the COVID-19 pandemic. It showed improvement compared to 14.1 in 2020, 15.8 in 2021, and 15.8 in 2022 during the pandemic. A lower index indicates less economic hardship felt by the 국민. The index was calculated by reconstructing the “Economic Hardship Index” by American economist Arthur Okun. It sums the perceived unemployment rate and perceived inflation rate.

Hangyeonghyeop cited the decline in the perceived unemployment rate as the main reason for the index’s improvement last year. The perceived unemployment rate peaked at 13.6% in 2020, rising from 11.4% in 2018, then dropped to 9.0% last year. The perceived unemployment rate refers to an unemployment rate calculated by considering part-time workers seeking better jobs, job seekers preparing for employment, and discouraged job seekers as unemployed, although they are not counted in official unemployment statistics.

However, the quality of jobs declined. Last year, the number of workers working 36 hours or more per week was 20,511,000, a 0.8% decrease compared to 20,666,000 in 2018. The number of workers working less than 36 hours per week was 6,056,000, a 22.7% increase compared to 4,936,000 in 2018. Among part-time workers working less than 36 hours, the number of young people wanting to work more hours increased. As of last year, the “additional employment possible due to time constraints” was 706,000, a 19.7% increase from 590,000 in 2018.

The number of people dissatisfied with their current jobs and working side jobs also increased. Side job workers rose from 385,000 in 2018 to 481,000 last year, a 24.9% increase over five years. Hangyeonghyeop stated, “Although indicators such as the decrease in perceived unemployment rate show favorable employment conditions recently, the increase in part-time and side job workers indicates a decline in the quality of employment. It seems necessary to improve the quality of jobs, including increasing full-time employment.”

The perceived inflation rate was somewhat high at 3.5% last year. It was higher than 1.5% in 2018 and 0.3% in 2019 before the COVID-19 pandemic, as well as 0.5% in 2020 and 2.6% in 2021 during the pandemic. However, it improved compared to the highest rate of 5.2% in 2022.

According to the inflation rates by expenditure purpose announced by Statistics Korea last year, clothing and footwear (6.7%), food and accommodation (6.0%), other goods and services (5.8%), foodstuffs (5.5%), and household goods and domestic services (5.4%) all exceeded 5%. As of last year, 국민 aged 15-69 concentrated their consumption expenditure on sectors with high inflation rates such as food and accommodation (15.9%), foodstuffs (13.2%), and housing, water, electricity, and fuel (11.4%). Hangyeonghyeop explained, “Although the recent inflation trend is slowing down, 국민 still face a heavy burden from perceived inflation due to high price increases in dining out and public utility fees such as electricity and water, which account for a large share of 국민 consumption expenditure.”

Lee Sang-ho, head of the Economic and Industrial Headquarters at Hangyeonghyeop, said, “Although 국민’s perceived economic hardship has eased to pre-COVID-19 pandemic levels, there remain areas needing improvement such as the deterioration in job quality and price increases in key items. It is necessary to create conditions for companies to expand investment and employment through regulatory reform, resolving employment rigidity, and tax support, and to focus on stabilizing living costs.”

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