The Korea Herald

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[Editorial] Worrying figures

Long-term joblessness increases amid structural worsening of unemployment

By Korea Herald

Published : July 27, 2021 - 05:30

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A string of data released last week showed structural deterioration in South Korea’s unemployment problem, heightening the need for a shift in the government’s policy efforts toward job creation.

The number of discouraged workers in the country stood at 583,000 in June, up 46,000 from a year earlier, according to figures from Statistics Korea.

It was the highest tally for the month since the state statistics office began compiling related data in 2014.

Discouraged workers refer to those who have not sought to find jobs in the last four weeks due to no suitable job positions or other reasons, though they are eligible for employment and are willing to work.

Those in their 20s and 30s accounted for 46.8 percent of the total discouraged workers last month, up 8.2 percentage points from the year before.

Separate data from the statistics agency showed the number of young Koreans preparing for job recruitment exams hit a record high of 859,000 in May, up 55,000 from a year earlier.

The figure accounted for 19.1 percent of 4.49 million economically inactive people aged 15-29. The proportion was also the highest since the agency started tracking related data in 2006.

The rise in the numbers of discouraged workers and people preparing to take job recruitment exams suggests many young people are being forced into long-term joblessness amid increasing difficulties in landing proper positions.

Government officials are quick to attribute the deteriorating employment conditions mainly to the economic fallout from the prolonged pandemic.

But the labor market remained sluggish before the outbreak of COVID-19 here early last year as President Moon Jae-in’s administration has pushed for ill-conceived policies, which have held back companies from increasing investment and hiring more workers.

Since assuming office in 2017, the Moon administration has implemented a set of pro-labor measures such as steep hikes in the minimum wage and a shortened workweek to carry forward its income-led growth drive. These moves have resulted in dampening corporate activity, leading to a reduction in the number of well-paying decent jobs offered by private companies.

The Moon government has spent more than 20 trillion won ($17.3 billion) annually to fund job creation programs. But most of the jobs created with taxpayers’ money have been low-paid part-time and temporary jobs largely taken by senior citizens.

As of 2020, 15.37 percent of all employed Koreans aged 15 or over were part-time employees, up from 12.2 percent in 2018. The increase rate over the two years was the steepest among 34 comparable member states of the Organization for Economic Cooperation and Development, according to a recent analysis by the Paris-based body of rich countries. Part-time workers are defined by the OECD as those who typically work less than 30 hours per week in their main job.

Korea also saw the proportion of temporary workers among the entire workforce increase from 21.2 percent to 26.1 percent, the second in 35 OECD members surveyed, over the cited period.

What’s particularly embarrassing for the Moon administration is the high jobless rate for youths, which goes up to around 25 percent when counting in those who have given up looking for jobs.

Earlier this month, the government announced a package of cash handout programs to strengthen support for unemployed and low income-earning youths under what was described as the “Human New Deal” initiative.

Such benefits may be necessary for young people in predicament. But what they need most is more opportunities to land stable decent jobs, which should be offered mainly by private companies.

With less than 10 months left before Moon’s five-year term ends, his administration should still step up efforts toward regulatory and labor reforms to encourage companies to increase investment and employment.

Nearly a third of people preparing for job recruitment tests plan to take civil service exams in the hope of becoming mainly low-ranking public servants.

Civil service posts might be preferred by young people due to greater job security. But the lack of proper job positions in the private sector seems to push so many youths to take the civil service route.

The country’s distorted labor market cannot be left unaddressed any longer. The Moon government, which has vowed to put top priority on job creation, should do what is necessary to reduce long-term joblessness among young people.