[Worst in 22 Years of Employment] 220,000 Fewer Employed Last Year Amid Corona Cliff

Statistics Korea 'December 2020 and Annual Employment Trends'

Annual Employment Decline Largest in 22 Years Since the Foreign Exchange Crisis
'Direct Hit from COVID-19'... Temporary and Daily Workers with Unstable Status Severely Affected

[Sejong=Asia Economy Reporters Kim Hyunjung and Joo Sangdon] Last year's employment situation recorded the worst since the 1998 International Monetary Fund (IMF) foreign exchange crisis. Due to the rapid contraction of economic activities caused by the COVID-19 pandemic, the annual decrease in the number of employed persons was the largest in 22 years. This is the first decline in employment since the 2009 global financial crisis, after 11 years. The significant impact was due to companies reducing hiring and the rapid freezing of employment in certain industries with a high face-to-face ratio, such as the service sector.

According to the 'December 2020 and Annual Employment Trends' released by Statistics Korea on the 13th, the number of employed persons last year was 26,904,000, a decrease of 218,000 (-0.8%) compared to the previous year. The annual decrease in employment compared to the previous year is the first in 11 years since the 87,000 decrease in 2009, and in terms of the scale of the decrease, it is the largest in 22 years since the IMF foreign exchange crisis in 1998 (-1,276,000).

Cases of employment decline compared to the previous year have occurred only five times, including the severe economic crises of △1984 Oil Shock (-76,000) △1998 Foreign Exchange Crisis (-1,276,000) △2003 Credit Card Crisis (-10,000) △2009 Global Financial Crisis (-87,000), and last year.

On the other hand, the number of unemployed persons was 1,108,000, an increase of 45,000 (4.2%) from 2019. The unemployment rate rose by 0.2 percentage points over one year to 4.0%, the same level as in 2001 (4.0%). With employment decreasing and unemployment increasing, the overall employment rate (60.1%) fell to its lowest since 2013 (59.8%). The industry with the largest decrease in employment was retail and accommodation and food services, which have a high face-to-face ratio, decreasing by 319,000 (-5.3%) compared to the previous year. Additionally, manufacturing and education services decreased by 53,000 (-1.2%) and 86,000 (-4.6%), respectively.

The employment shock was concentrated among those with unstable status such as temporary workers. Temporary workers decreased by 313,000 (-6.5%) and daily workers by 101,000 (-7.1%) compared to the previous year. The decrease in temporary workers is the largest since statistics began in 1989, and the decrease in daily workers is the largest since 2012.

Regular workers numbered 14,521,000, an increase of 305,000 (2.1%). The increase is the smallest since 2005 (272,000).

Self-employed individuals also faced difficulties. Self-employed persons with employees numbered 1,372,000, a decrease of 165,000 (-10.8%) compared to the previous year, the largest decrease since 1998 (247,000). Unpaid family workers numbered 1,042,000, a decrease of 35,000 (-3.3%). Regular workers numbered 14,521,000, an increase of 305,000 (2.1%). The increase is the smallest since 2005 (272,000). So-called 'solo entrepreneurs' without employees numbered 4,159,000, an increase of 90,000 (2.2%).

The economically inactive population, who are neither employed nor seeking jobs, increased overall by 455,000, due to rises in those resting (282,000; 13.5%) and those engaged in household duties (154,000; 2.7%). The number of discouraged job seekers was 605,000, an increase of 73,000 compared to the previous year.

As the employment shock became apparent, the government is striving to prepare countermeasures. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, chaired consecutive meetings including the ministerial meeting (Green Room Meeting) and the Central Disaster and Safety Countermeasure Headquarters meeting, expressing deep concern over the employment report card.

Deputy Prime Minister Hong stated, "The difficult employment situation is expected to continue through January and February based on indicators," and added, "We will additionally prepare measures to revitalize youth employment and expand women's jobs within the first quarter."