South Korea extended the streak of job losses to eight months in October, amid the prolonged coronavirus pandemic crisis, according to government data released last week. The number of employed people in the country shrank by 421,000 from a year earlier to 27.09 million last month.
The jobless rate rose by 0.7 percentage point on-year to 3.7 percent, the highest figure for October in two decades. The number of unemployed people here stood at 1.03 million last month, up 164,000 from a year earlier, as almost all age groups reported rises in joblessness.
The unemployment rate for young adults -- those aged between 15 and 29 -- reached 8.3 percent last month, up 1.1 percentage points from the year before. The actual youth unemployment rate, which counts in those who work less than 36 hours per week or have looked for a job unsuccessfully for the past four weeks, soared to 24.4 percent, the highest since the state statistics agency began compiling related data in January 2015.
Even considering the impact of the COVID-19 pandemic on the labor market, the latest job figures should embarrass the Moon Jae-in administration, which has vowed to put a top policy priority on creating more jobs. The first executive order issued by Moon after he took office in May 2017 was to set up a presidential commission on job creation.
Commenting on the employment data for October, however, Finance Minister Hong Nam-ki, who doubles as deputy prime minister for economic affairs, said it was fortunate that the seasonally adjusted number of employees bounced back last month.
The steep worsening of the job market cannot be covered up by singling out an insignificant indicator that has turned positive.
It is clear that ill-conceived policies implemented by the Moon administration over the past 3 1/2 years were mainly responsible for the deteriorating employment conditions.
A sharp increase in the minimum wage and a shortened workweek have increased labor costs, resulting in a massive loss of jobs particularly at small and medium-sized enterprises.
A string of regulatory measures has sapped corporate activity even before the COVID-19 outbreak here early this year, hampering private firms from increasing investment and employment.
The Moon administration’s push to create short-term temporary jobs with taxpayers’ money has reached its limit. Moreover, most such jobs have gone to senior citizens, with woes faced by jobless young people having only increased.
Data from Statistics Korea showed the number of employees in their 20s fell by 210,000 from a year earlier in October, the sharpest monthly decline since January 2009.
Nearly 290,000 people aged between 25 and 39 who graduated from or attended college have never landed a job. The figure, which represents a 24.2 percent on-year increase, is the highest since related data was first compiled in 2000.
Concerns are rising that these young people who have been out of work for a long time might become a “lost generation” in Korean society.
Jobless youths tend to postpone or give up marriage, further pushing down the country’s birthrate, which has been among the world’s lowest in recent years. This will result in weakening the country’s competitiveness and growth potential in the long term.
The Moon administration and the ruling Democratic Party of Korea are urged to make a fundamental policy shift to improve the worsening job market and provide young people with more job opportunities.
Focus should be put on carrying out regulatory and labor reforms to encourage private firms to increase investment and hire more workers.
The employment statistics released last week showed jobs disappeared across the board from the private sector in October, while the public sector gained jobs.
The manufacturing industry shed 98,000 jobs on-year last month, with the accommodation and food service segment and the wholesale and retail sector losing 227,000 and 188,000 jobs, respectively. To the contrary, the public administration sector gained 123,000 jobs and the social welfare segment added 105,000 positions.
This is no time to continue to gloss over the aggravating employment conditions by suggesting selected figures or adhering to wishful thinking about the future of the economy.
For the remainder of his term, Moon should prove he is genuinely prioritizing job creation by discarding his administration’s misguided policies.