The Job Market Frozen Even More Due to the Impact of COVID-19

Employment Trends for December 2020 and the Entire Year

Number of Employed Decreased by 218,000 Last Year... Largest Drop in 22 Years
Down by 628,000 in December Alone

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[Asia Economy Reporter Joo Sang-don] Due to the rapid contraction of economic activities caused by the COVID-19 pandemic, the annual decrease in the number of employed persons last year was the largest in 22 years. This marks the worst record since the 1998 International Monetary Fund (IMF) financial crisis.

According to the 'December 2020 and Annual Employment Trends' recently released by Statistics Korea, the number of employed persons last year was 26.904 million, a decrease of 218,000 (-0.8%) compared to the previous year. This is the first annual decrease in the number of employed persons in 11 years since a drop of 87,000 in 2009. In terms of the scale of the decrease, it is the largest in 22 years since the IMF financial crisis in 1998 (-1.276 million).

On the other hand, the number of unemployed persons was 1.108 million, an increase of 45,000 (4.2%) compared to 2019. The unemployment rate rose by 0.2 percentage points over one year to 4.0%, which is the same level as in 2001 (4.0%).

The intensity of the employment shock caused by COVID-19 was strongest in December last year due to the social distancing level being raised to 2.5. The number of employed persons aged 15 and over in December was 26.526 million, down by 628,000 compared to the same month the previous year. This decrease is 152,000 greater than the largest drop earlier that year in April (-476,000). The downward trend, which began in March last year (195,000), continued for 10 consecutive months until December, marking the second-longest continuous decline in history after the 16-month consecutive decrease recorded immediately after the IMF financial crisis (January 1998 to April 1999).

The situation is not expected to improve easily in early this year either. Jung Dong-myung, Director of the Social Statistics Bureau at Statistics Korea, said, "The impact of the social distancing level 2.5 adjustment on December 8 last year was reflected, but the January statistics survey period starts from January 16," adding, "If the level is maintained until the 17th, this will have an effect."