South Korea recorded the largest job growth in 7 1/2 years last month, according to government data released this week. The data from Statistics Korea showed the number of employed people in the country reached 27.68 million in September, up 671,000 from a year earlier, the steepest increase since March 2014, when the figure rose by 726,000 on-year.
Buoyed by the increase, Finance Minister Hong Nam-ki, who doubles as deputy prime minister for economic affairs, said the job recovery momentum had become “evident.”
But a closer look at the data indicates that the country’s actual employment conditions have deteriorated despite the superficial rise in the total number of jobs.
What is particularly notable is the shrinking number of employees in their 30s and jobs in the manufacturing sector.
The number of 30-something workers, who are more likely to look for decent well-paying jobs than other age groups, fell by 12,000 in September from a year earlier. The manufacturing sector, one of the pillars of Asia’s fourth-largest economy, recorded an on-year decline in jobs of 37,000 last month.
President Moon Jae-in’s administration has sought to gloss over the worsening employment situation by creating a large number of low-paying temporary jobs with taxpayers’ money. The job data compiled by the state statistics agency classifies all people working more than one hour per week as employees. Nearly half of jobs added in September were low-skilled or manual jobs, which were taken mostly by people aged 60 or above.
Since coming to office in 2017, the Moon administration has pushed for an income-led growth policy by taking a set of measures purported to be labor-friendly, such as steep minimum wage hikes, the rigid implementation of a shortened workweek and pressure on firms to turn temporary positions into regular ones.
But this approach has only resulted in forcing employers to cut their payrolls to reduce growing personnel costs.
Regular jobs at large private companies and public corporations, which are preferred by most young job seekers, have continued to decrease in recent years.
According to data from the Korea Economic Research Institute, a private think tank, the number of workers hired by the country’s 30 largest business groups fell by nearly 20,000 over the previous year to slightly over 1.31 million in 2020. The data also showed that 36 major public corporations here recruited 6,833 new employees last year, down from 9,326 in 2019. During the first half of this year, they hired only 1,911 workers.
As of May, the number of people in their 20s who have remained jobless for more than three years stood at 278,000. Among them, nearly 100,000 had completely given up looking for a job.
The growing frustration felt by young job seekers was reflected in a recent survey conducted by the research institute of students and graduates from universities across the country. More than 65 percent of the 2,713 respondents said they had virtually stopped trying to land the jobs they want.
With opportunities for decent jobs continuing to dwindle, an increasing number of young adults have turned to starting their own business. But inexperienced and unprepared, many of them end up closing their business at an early stage.
With Moon’s five-year tenure set to end in May, it may be difficult to expect his administration to make a fundamental shift in policy. Still, it should not spare efforts to alleviate the youth unemployment problem by forging more corporate-friendly conditions to encourage companies to increase investment and hire more workers.
Improving the business environment through effective deregulation and financial incentives is also needed to promote the re-shoring of Korea’s manufacturing firms running factories abroad.
According to a report submitted this week to a lawmaker by the Korea Trade-Investment Promotion Agency, only 103 manufacturers have moved their overseas production facilities back home since 2014 when a law was enacted to facilitate re-shoring. So far, less than half of them have actually begun operating factories here.
In a recent survey of Korean companies operating abroad, which was conducted by the Ministry of Trade, Industry and Energy, 99.5 percent of them said they had no plan to return home, mostly citing the lack of substantial support.
Efforts should now be stepped up to promote the re-shoring of manufacturers, which is needed not only to create more jobs but also to secure industrial competitiveness amid concerns over disruptions in global supply chains.
By Korea Herald (email@example.com