[Report] "Crowded with Unemployment Benefit Applicants"... Jobless Surge Amid Economic Cold Wave

Job Losses Across Duty-Free Shops, Service, and Construction Industries
2030 Generation Faces Unstable Lives as Contract Workers
Experts Say "Growth Stagnates... Employment Instability Expected Until Early Next Year"

[Asia Economy Reporter Jang Sehee] "I have to pay back the loan interest and raise two children, but right now, I see no way to survive."

On the 16th, when the subzero cold continued, at the Seoul Eastern Employment Center of the Ministry of Employment and Labor in Songpa-gu, Seoul, Kim Jiyong (57), who visited the center with his wife, said, "I was managing employees at a mart, but suddenly was asked to resign in December last year," adding, "Our family's fixed monthly expenses are at least 3 million won, but we have no savings, so I am very worried," sighing deeply. Kim's wife, who had been a full-time housewife, also visited the center for employment counseling after her husband lost his job.

At 1:40 p.m., footsteps of people applying for unemployment benefits continued on the first floor of the Seoul Eastern Employment Center. More than 50 people visited the center in just one hour.

They all headed to the 4th floor where the unemployment benefits briefing session was held, and at the entrance was a desk for 'Unemployment Benefits Information.' Soon, all 17 unemployment benefits reception counters were filled with counselors, and the number of people waiting after taking a number ticket was about 30 at a glance. About 150 people sometimes crowded the center all at once to attend the 'Unemployment Benefits Briefing Session.' An official from the employment center said, "The three weeks before the Lunar New Year holiday are the busiest time of the year," adding, "In January, there are about 300 cases in total, which is about 100 more cases per day compared to November and December of last year."

Around 2 p.m. on the 16th, Seoul Eastern Employment and Labor Office in Songpa-gu, Seoul. Unemployed individuals are consulting about unemployment benefit applications. / Photo by Jang Sehee jangsay@

The recent increase in unemployment benefit applicants is interpreted as a result of prolonged COVID-19, combined with the so-called 'three highs' phenomenon of high exchange rates, high interest rates, and high prices, which have worsened corporate management difficulties. According to the 'December 2022 Labor Market Trends' announced by the Ministry of Employment and Labor on the 10th, the number of new unemployment benefit applicants sharply increased over the last three months: 77,000 in October, 86,000 in November, and 99,000 in December last year.

Many of the unemployed were from duty-free shops or the service sector. Choi Ikgyu (53), who was in charge of service promotion, said, "Recently, the company's situation worsened, and I was notified of a voluntary resignation," adding, "Since younger generations are advancing in the mart service sector, it is not easy to find a job, so I am looking into reemployment in the nursing center field." Kim Youngae (51) said, "I was asked to resign from the duty-free shop where I worked for 30 years," adding, "My children are already grown, so I don't worry about childcare, but losing my job at such an early age means I need to find a new job quickly." Kim Heeja (52) said, "I was in charge of safety and order in the service sector, but due to the company's situation, I was encouraged to retire," adding, "I found it more convenient to apply in person, so I came to the center."

Around 2 p.m. on the 16th, unemployed individuals attended an unemployment benefits briefing at the Seoul Eastern Employment and Labor Office in Songpa-gu, Seoul. Photo by Jang Sehee jangsay@

There were also people in their 20s and 30s who lost their jobs suddenly after being employed on a contract basis. Jang Minho (31), who was in charge of video editing at a church, said, "Considering the rise in prices, I asked for a salary increase, but I was told they would not renew my contract," adding, "I am paying off student loans and personal loans with severance pay, but I am worried because I have been unemployed for a long time." Choi Jiwon (29), who worked at a construction company, said, "I was in charge of sales and was fired at the end of last year," adding, "Since the construction industry seems difficult overall, I am looking into employment in the language education field." Choi decided to give up on her previous experience and take on a new challenge because working in a recession-hit sector could lead to another dismissal.

With the ongoing trend of interest rate hikes this year, the business environment for small and medium-sized enterprises is expected to worsen, likely increasing the number of unemployment benefit recipients. Moreover, considering that the number of unemployment benefit applications is highest every January and February, there is a forecast that the number of recipients could reach a peak in the first half of this year. Professor Hong Kiyong of the Department of Economics at Incheon National University said, "Even looking at the Bank of Korea's growth forecast of 1.7% for this year," adding, "Since the real economy is in a difficult state, employment instability will continue until early next year." Professor Hong added, "Since growth is almost stagnant, this worsening trend is expected to continue."