S. Korea suffers steepest job losses in 10 years amid pandemic

  

The number of unemployed in South Korea in May hit the highest level in more than a decade as businesses continued to freeze jobs amid the coronavirus pandemic, data showed Wednesday. 

According to data released by Statistics Korea, the number of employed totaled at 26.93 million last month, shedding 392,000 jobs compared with a year earlier, which marked the third consecutive monthly loss. 

This was the first occurrence since the country reported job losses for four straight months between October 2009 and January 2010, during the global financial crisis.

The jobless rate jumped 0.5 percent to reach 4.5 percent in the same period, the biggest on-year rise since 1999 when the economy lost 658,000 jobs in the aftermath of the Asian financial crisis. 

Meanwhile, the labor force participation rate -- the percentage of those aged 15 or older being employed or looking for jobs -- fell 1.3 percentage points on-year to 65.8 percent.

The sharp spike in job losses last month came as many continued to avoid going outdoors to prevent the virus spread even though the government had eased social distancing guidelines in an effort to stimulate pent-up demand for services as well as corporate activities. 

By industry, 189,000 jobs vanished in the wholesale and retail sector, while the accommodation and food service sector lost a total of 183,000 jobs, data showed. 

As exports continued to fall and consumption remained sluggish, local businesses have increasingly slashed jobs to reduce production costs, officials said. The nation’s exports fell nearly 24 percent last month, posting an on-year decline for the third consecutive month since March, according to the Ministry of Trade, Industry and Energy. 

Citing the data, Finance Minister Hong Nam-ki urged the National Assembly to take timely action on the government’s latest extra budget bill, which is awaiting parliament’s approval. Earlier last week, Korea proposed its third extra budget worth over 30 trillion won ($24.5 billion) to help key industries hit hard by the pandemic. 

“As the COVID-19 fallout caused economic contractions in trading partners, the country has suffered from falling exports, which took a toll on employment in manufacturing segment,” Hong said in a Facebook post after the unemployment data was released.

“To promptly respond to staggering job losses in the wake of the coronavirus outbreak, the government has called for the parliament’s swift approval of the supplementary budget bill backing a series of relief measures to safeguard employment across industries, which was submitted last week.”

By Choi Jae-hee (cjh@heraldcorp.com)