Back To Top

[Editorial] Worrying figures

Massive losses of full-time jobs show Korea’s worsening employment structure

Employment and Labor Minister Lee Jae-kap said last week that the nation’s employment situation had shown signs of recovery, as he called for the swift implementation of the recently approved supplementary budget to expedite improvements in the job market.

He cited data released by Statistics Korea early this month, which showed that the on-year decline in the number of employed people in the country had dropped to 473,000 in February from 982,000 in January. Much of the improvement was attributable to the resumption of government-funded job programs. Those programs are usually terminated at the end of each year, and preparations are made in January to begin new ones.

The government might be able to put forward better employment figures by reinforcing fiscally sponsored job programs. But it is only a matter of time before those figures deteriorate again.

Since assuming office in May 2017, President Moon Jae-in’s administration has focused on increasing public-sector employment with taxpayers’ money, with most of the added jobs being part-time, temporary positions filled by elderly people. Over the past few years, the administration has dampened corporate activity by imposing stricter regulations and by introducing a set of pro-labor measures, including steep minimum wage hikes and inflexible limits on overtime.

This ill-conceived policy approach has weakened the country’s employment structure.

Data recently compiled by an opposition lawmaker’s office showed that the number of full-time employees working more than 40 hours per week had decreased by 1.95 million over the previous three years to 18.89 million at the end of 2020. Over the cited period, the number of jobs with weekly work hours below 40 increased by 2.13 million.

Government officials stress that the local labor market recorded a net increase of 180,000 jobs during the period. But the emphasis should rather be on the fact that decent jobs have disappeared in massive numbers and the quality of employment has worsened since the launch of the Moon administration.

During the period between 2013 and 2017 under the government of Moon’s predecessor Park Geun-hye, the number of full-time employees working more than 40 hours per week rose by 2.14 million, while jobs with fewer than 40 work hours decreased by 720,000.

It should be noted that the country’s labor market began to worsen before the coronavirus outbreak early last year. Korea’s employment rate dropped from 65.1 percent in 2017 to 62 percent in 2019. Over the same period, the average for member states of the Organization for Economic Cooperation and Development rose from 64.2 percent to 65.5 percent.

The Moon administration’s misguided policy has particularly frustrated young job seekers, who are having difficulty finding secure, well-paid jobs. The unemployment rate for people aged between 15 and 29 reached 10.1 percent last month, more than double the overall jobless rate of 4.9 percent, according to data from the state statistics office. The figure is estimated at nearly 30 percent when youths who work fewer than 36 hours per week or have given up looking for jobs are counted.

The government recently announced a plan to spend 5.9 trillion won ($5.2 billion) to create 1.04 million jobs for young people this year. The plan cannot be expected to ease the growing woes faced by young job seekers, as most of the jobs to be added with taxpayers’ money are low-paid temporary or part-time positions.

The full-time jobs preferred by young people could be generated mainly by private companies. But a recent survey of major local firms suggests that an increase in the number of decent private-sector jobs down the road is unlikely. In the survey, which targeted the country’s 500 largest companies in terms of turnover, 17.3 percent of the respondents said they would not hire new employees in the first half of this year. Another 46.3 percent had yet to draw up a recruitment plan for the period.

When asked what was holding them back from increasing employment, the companies polled cited rigid employment conditions and a steep rise in personnel costs, as well as the pandemic-caused economic slump at home and abroad.

The Moon administration and ruling party lawmakers should now depart from their misguided policy direction and focus on forging corporate-friendly conditions to help private companies expand investment and add the kinds of jobs young people want to land.