Published : 2014-03-13 20:30
Updated : 2014-03-13 20:30
Statistics Korea has released another impressive jobs report. In February, the number of employed people totaled 24.82 million, up 835,000 from a year ago.
The on-year job growth was the largest since March 2002 when 842,000 jobs were added. The gain was also much greater than those made in the preceding months: 705,000 in January, 560,000 in December, 588,000 in November and 476,000 in October.
The upbeat employment data could be seen as suggesting that the economic recovery has strengthened to the point of fueling massive job creation. Yet one-off factors need to be taken into account in interpreting the figures.
Last month’s surge was partly attributable to the low base effect. Last year, the Lunar New Year holiday fell in February, causing a contraction of employment in the wholesale-retail and lodging-dining sectors. So a mere 201,000 jobs were created in that month.
While caution is warranted, improvement in labor market conditions is unmistakable. Last month, the number of employed people increased 113,000 from January, extending the positive growth streak to nine months.
As the job market outlook continued to improve, the number of people joining the workforce kept growing. In February, the labor force swelled by 1.02 million people, the largest number since June 1999.
A large proportion of these people landed a job, but 189,000 of them failed to find employment. As a result, the unemployment rate rose. This rise in the jobless rate, however, is not all bad, as it results from more people seeking work.
The employment environment for young people, however, remained tough. The youth unemployment rate shot up to 10.9 percent last month, the highest since January 2000, when it soared to 11 percent.
One factor that drove up the rate was a change in the schedule for the low-rank civil service examination. The government received applications for this year’s exam last month, two months earlier than last year. Some 200,000 applied for the exam, boosting the number of young job seekers.
The large turnout indicates both the popularity of employment in civil service among young people and a shortage of private-sector jobs for them.
To further improve the job market outlook, the government needs to step up its deregulation campaign and ensure that job creation initiatives included in the three-year economic innovation plan are implemented as planned.
On Wednesday, the government unveiled another deregulation package aimed at promoting regional development. It called for relaxing development-restricting regulations for “greenbelt” zones so that commercial facilities and industrial plants could be built in these areas.
It also proposed to put local governments in the driver’s seat in drawing up and implementing regional development strategies, with the central government playing a supportive role.
The government expects the package to induce 14 trillion won ($13 billion) worth of fresh investment in provincial areas.
The plan is well conceived. But the devil is in the implementation. Many investment-promoting proposals contained in the government’s previous deregulation packages have not yet been put into practice due to differences between the two main political parties.
So while drafting good plans is important, a more important job for President Park Geun-hye is to enlist cooperation from the main opposition Democratic Party in implementing them.