Employment increased by 509,000 in December... Growth rate slows
Youth employment decreased by 25,000... Declining for 2 consecutive months
Outlook for this year is bleak... Growth expected to be limited to 100,000
[Asia Economy Sejong=Reporters Kim Hyewon and Lee Junhyung] The increase in the number of employed persons has decreased for seven consecutive months, bringing the figure on the verge of falling below 500,000. Due to a combination of factors such as natural population decline, the number of employed youth aged 15 to 29 has also decreased for two consecutive months, clearly showing signs of employment slowdown. Although the job market experienced a favorable trend last year, the prevailing outlook is that a cold wave will hit this year due to the economic recession. The government expects the increase in employed persons this year to be only one-eighth of last year's level.
According to the 'December 2022 and Annual Employment Trends' released by Statistics Korea on the 11th, the number of employed persons last month was 27,808,000, an increase of 509,000 compared to the same month last year. Employment has increased for 22 consecutive months since March 2021, but the growth rate has declined for seven consecutive months since reaching 935,000 in May last year. The increase in employed persons, which exceeded 1 million at the beginning of last year, has continued to decline, eventually shrinking to the 500,000 range within a year.
Youth Employment Decreases for Two Consecutive Months
The slowdown in growth was particularly pronounced among the youth. Last month, the number of employed persons aged 15 to 29 decreased by 25,000 compared to the same month last year. This marks the second consecutive month of decline following November last year. Youth employment had been increasing every month since February 2021 (-142,000) but shifted to a decline in November last year after 21 months of growth.
The situation is similar for those in their 40s, the economic backbone. As of last month, employment among people in their 40s decreased by 57,000 compared to the same month last year, continuing a six-month consecutive decline. Compared to November (-6,000), the decrease has jumped more than ninefold. On the other hand, employment among those in their 50s and 60s increased by 110,000 and 440,000 respectively. Employment among those in their 30s increased by only 42,000. This is analyzed as the aging population and demographic changes driving employment growth among those aged 60 and above.
The quality of employment, as measured by hours worked, did not improve. Last year, the number of employed persons working 36 hours or more per week decreased by 499,000 compared to the previous year. Conversely, those working less than 36 hours increased by 1,322,000. Even looking at last month alone, the number of employed persons working 36 hours or more increased by only 139,000, while those working less than 36 hours increased by 297,000. This indicates that the increase in employment was centered on short-term jobs. Gomi Sook, Director of Social Statistics at Statistics Korea, explained, "Working hours are trending downward," adding, "The significant increase in those working less than 36 hours last year was also largely influenced by holidays during the survey period."
Employment Increase Expected to be 100,000 This Year
The employment outlook for this year is not optimistic. Due to the global economic recession, employment, a lagging economic indicator, is inevitably expected to be affected. Major domestic and international institutions forecast South Korea's economic growth rate to be in the 1% range this year. The global economic growth rate is expected to be similar. The World Bank analyzed that the global economic growth rate will be 1.7% this year. Additionally, the employment increase of 816,000 last year, the highest in 22 years, is expected to act as a base effect on this year's employment indicators.
This is why the Ministry of Economy and Finance expects the increase in employed persons this year to be only 100,000. Compared to last year's increase of 816,000, this is a reduction to one-eighth. The unemployment rate is expected to rise by 0.3 percentage points from 2.9% last year to 3.2% this year. A Ministry of Economy and Finance official said, "A significant part of the decrease in employment growth is due to statistical base effects," adding, "(However) the combined effects of economic slowdown and population decline are also at play."
The Ministry of Economy and Finance stated that it will introduce additional measures if the employment situation worsens. It also reiterated its commitment to labor market reforms, including wages and working hours. The ministry said, "We will actively respond to labor shortages through customized employment support and strengthen support for vulnerable groups by expanding the employment safety net," adding, "We will continuously expand the foundation for creating quality private-sector jobs through regulatory innovation and make every effort to improve the labor market structure."
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