KCCI "Recent Employment Recovery Slow in Youth Sector, Focused on Public and Semi-Public Areas"

Presentation on "Three Key Characteristics and Implications of Recent Employment Trends"

[Asia Economy Reporter Kiho Sung] The Korea Employers Federation (KEF) announced a report titled 'Three Characteristics and Implications of Recent Employment Trends (Q4 Last Year)' on the 13th. In the report, KEF pointed out ▲Delayed employment recovery among the youth ▲Employment recovery concentrated in the public and quasi-public sectors ▲Regional disparities in employment recovery trends.

Regarding the 'Delayed employment recovery among the youth,' KEF stated that although the number of employed youth (aged 15-29) has increased recently, it has not yet recovered to the pre-COVID-19 level (Q4 2019). While the economically inactive youth population has decreased, the categories of 'resting' and 'preparing for employment,' which can be seen as chronically unemployed, have increased by 15.2% and 8.6% respectively compared to before COVID-19.

The number of employed youth was 3,922,000 in Q4 last year, reaching only 98.5% of the 3,982,000 recorded in Q4 2019 before COVID-19.

The economically inactive youth population was 4,542,000 in Q4 last year, down by 192,000 from 4,734,000 in Q4 2019. However, by activity status, while 'childcare/housework' and 'commuting to educational institutions/academies' decreased, 'resting' and 'preparing for employment' increased by 54,000 and 43,000 respectively compared to pre-COVID-19 levels.

Regarding the 'Employment recovery concentrated in the public and quasi-public sectors,' KEF estimated that a significant portion of the unemployed during the economic downturn caused by COVID-19 in the 11th economic cycle was absorbed into the public and quasi-public sectors (public administration, health and welfare). This suggests that even if economic recovery continues, the pace of employment recovery is expected to be slow.

Additionally, during the COVID-19 crisis, employment in the private sector, including wholesale and retail trade, accommodation, and food services, declined significantly.

As the economy has gradually recovered through the COVID-19 crisis, employment in the public and quasi-public sectors such as public administration and health and welfare has increased substantially. This reflects that a considerable number of unemployed people caused by the COVID-19 crisis were absorbed into these sectors benefiting from government policies.

KEF also noted that regarding 'Regional disparities in employment recovery trends,' although the number of employed persons has recently increased, there are regional differences in the pace of employment recovery. Gyeonggi-do, Sejong City, and Jeonbuk showed strong recovery, whereas Ulsan City, Gyeongbuk, and Gwangju City exhibited weak recovery.

Gyeonggi-do, Sejong City, and Jeonbuk had employment growth rates last year exceeding the national average (1.4%), and the number of employed persons surpassed pre-COVID-19 levels (Q4 2019). In contrast, Ulsan City, Gyeongbuk, and Gwangju City recorded negative employment growth rates last year and have yet to recover to pre-COVID-19 employment levels.

Lim Young-tae, head of KEF's Employment Policy Team, pointed out, “In Q4 last year, the employment trend showed delayed recovery among youth as chronic unemployment increased compared to pre-COVID-19. Additionally, a significant portion of unemployed individuals during the COVID-19 crisis in the current economic cycle were absorbed into public and quasi-public sectors such as public administration and health and welfare, which is expected to slow the pace of employment recovery. Employment recovery trends also vary by region, leading to regional employment polarization.” He added, “To achieve full employment recovery, it is necessary to strengthen employment support services for chronically unemployed youth, promote labor reforms reflecting industrial structural changes, and establish region-specific employment measures.”

He also stated, “It is essential to enhance accessibility and expertise of employment support services for unemployed youth by building a big data-based employment information platform and expanding dedicated youth employment support centers and services.”

Lim emphasized, “Customized employment measures considering regional industrial and employment structure characteristics are needed, along with the improvement of regional vocational training systems and activation of regional employment support centers to strengthen support for regional job creation.”