Simultaneous Expansion of Labor Supply and Demand
Impact of Recovery in Face-to-Face Service Industry
[Asia Economy Reporter Seo So-jung] The significant increase in the number of employed persons in the first half of this year was driven by a rise in employment among young women (ages 15-29) and the elderly (60 and above). Additionally, with both labor supply and demand expanding simultaneously, an increase in regular employment, and a gradual recovery in face-to-face service industries, the upward trend in employment numbers is expected to continue for the time being.
On the 4th, the Bank of Korea stated in its report "Assessment of Recent Employment Growth" (BOK Issue Note) that "the number of employed persons in the first half of this year increased by 941,000 compared to the same period last year, showing a significant improvement that exceeds the long-term trend."
According to the Bank of Korea, labor supply and demand are expanding simultaneously from the labor market perspective. Labor supply has increased, with the economically active population surpassing pre-pandemic levels, and the number of job openings has risen sharply across most industries. Due to the easing of quarantine policies, job openings in face-to-face service sectors such as accommodation and food services (55.8%) and arts, sports, and leisure (35.2%) have increased significantly. There is also a strengthened tendency for the non-economically active population to transition directly into employment without passing through unemployment, indicating robust labor demand.
In particular, employment among young women has increased sharply. Of the increase in youth employment in the first half of this year, 67.5% was attributed to the rise in female employment. By industry and occupation, young women’s employment mainly increased in information and communication, professional, scientific, and technical services such as non-face-to-face service sector regular office jobs, healthcare and welfare professionals like nurses, and temporary positions in food and accommodation services.
Song Sang-yoon, head of the Employment Analysis Team at the Bank of Korea’s Research Department, explained, "The increase in employment among young women appears to be influenced by the activation of the non-face-to-face economy, expansion of quarantine and care personnel, and increased face-to-face consumption following the end of social distancing." However, he added, "In the case of temporary jobs in food and accommodation services, as of June, 52.7% were employed at small businesses with fewer than five employees, and the average weekly working hours were only 19.1 hours, indicating somewhat vulnerable employment quality."
In the first half of this year, employment among the elderly increased by an average of 443,000 per month, accounting for 47.1% of the total employment increase across all age groups compared to the same period last year. Employment growth was particularly notable among production and field workers and agricultural, forestry, and fishery workers in small businesses with fewer than 30 employees. The increase in agricultural, forestry, and fishery employment may also reflect the impact of an increase in returning farming households, with elderly individuals unable to find other jobs moving into these sectors. Despite increased labor demand in small business production and field jobs, employment growth occurred only among the elderly, which is analyzed to be due to younger age groups avoiding production and field jobs in small and medium-sized enterprises.
Song stated, "The recent strong employment growth is an unusual phenomenon even when compared to past economic crises such as the Asian financial crisis and the global financial crisis." However, he cautioned, "Given that the recent employment increase is somewhat steep relative to production, the negative base effect from temporary face-to-face consumption growth, increased uncertainty due to potential COVID-19 resurgence, and the possibility of economic slowdown, it will be difficult to sustain the current high growth rate in the medium to long term."
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