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[News Focus] Government unemployment calculations face skepticism

SEJONG -- Government officials actively publicized that the number of unemployed people aged between 15 and 29 and the corresponding unemployment rate had dropped during the Moon Jae-in administration.

They used a variety of figures held by the Ministry of Employment and Labor in their online policy briefing in December 2019, dismissing arguments in the market that the youth jobless rate has become severe.

A government official cited the figure that the number of jobless Koreans aged 15-29 was about 300,000 as of November 2019 out of the economically active population for the age group, 4.295 million.

This could mean the youth unemployment rate was 7 percent, and might suggest to some that more than 9 out of every 10 young Koreans are employed.

But the figure does not include underemployed people, who work less than 36 hours a week and want to work more hours, as well as seasonal workers who are out of work for part of the year.
 
Jobseekers gather in a center for youth employment, provided by Seoul City. (Yonhap)
Jobseekers gather in a center for youth employment, provided by Seoul City. (Yonhap)

The US-based International Monetary Fund pointed out last year that South Korea’s method for calculating the unemployment rate failed to reflect the reality facing job seekers. Local analysts in the private sector have also said there needs to be more focus on the Supplementary Index III for Employment figures compiled by Statistics Korea.

The index refers to the “extended” or “sentiment-reflected” jobless rate, which counts underemployment -- as well as official unemployment -- as de facto unemployment.

According to the Supplementary Index III for Employment, the youth jobless rate reached 20.4 percent as of November, the most recent month for which statistics are available.

“This also means that at least 1 million (1,000,824) out of the economically active population for the age group on an extended basis (4.906 million according to Statistics Korea database) are still looking for jobs,” said a research analyst in Seoul.

The extended figure is higher by 700,000 than the unemployment statistic used by the government in its briefing, and the extended jobless rate is 13.4 percentage points higher than the official rate of 7 percent.
 
(Graphic by Han Chang-duck/The Korea Herald)
(Graphic by Han Chang-duck/The Korea Herald)

The serious situation is also seen in the global comparison data on employment held by the Organization for Economic Cooperation and Development, though its age-group classification (15-24) is somewhat different from Korea’s 15-29.

South Korea’s youth employment rate was far below the OECD average. While the OECD members’ average employment rate for those aged 15-24 was 42.3 percent, the corresponding figure for Korea stood at 26.3 percent as of September 2019, placing Korea at No. 31 out of 36 countries surveyed.

The corresponding figures for young workers in the US and Japan came to 51.4 percent and 47.6 percent, respectively. Mexico and Ireland respectively posted employment rates of 41.7 percent and 40.8 percent for the 15-24 age bracket.

The respective average youth employment rates for the eurozone, EU and G7 were 34 percent, 35.7 percent and 46.4 percent.

For Koreans who say they do not support the incumbent administration, jobs are one of the main reasons cited in polls.

President Moon Jae-in’s detractors say the government’s labor policies consist largely of using state funds to directly create nonregular jobs in the public sector.

Critics point to figures showing improved employment rates for senior citizens in their 60s, who gained temporary jobs at government offices or state-funded agencies.

Likewise, the improvement in hiring of those in their 20s could be attributable to an increase in part-time or short-term jobs rather than an improvement in stable jobs, a labor-research professor in Seoul said.

By Kim Yon-se (kys@heraldcorp.com)



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