Employment Recovers to 300,000 in September... But Youth and Manufacturing Continue to Decline (Comprehensive)

The increase in the number of employed persons recovered to the 300,000 range last month. The growth in employment, which had slowed due to adverse weather conditions such as concentrated summer heavy rains, expanded for two consecutive months following August. However, the number of manufacturing sector employees, a core part of our economy, continued to decline for the ninth consecutive month. As the 'low growth-low unemployment' phenomenon prolongs, concerns have been raised that the quality of employment may deteriorate due to the weakening fundamental strength of our economy.

Seunju Seo, Director of the Social Statistics Bureau at Statistics Korea, is announcing the employment trends for September 2023 on the morning of the 13th at the Government Complex Sejong in Sejong City. [Image source=Yonhap News]

According to the 'September 2023 Employment Trends' released by Statistics Korea on the 13th, the number of employed persons last month was 28,698,000, an increase of 309,000 compared to the same month last year. Employment has been on an increasing trend for 31 consecutive months since March 2021. The monthly increase in employment, which had slowed to 211,000 in July, expanded for two consecutive months including last month.

The overall employment rate for those aged 15 and over was 63.2%, up 0.5 percentage points from a year earlier. This is the highest level for September since monthly statistics began in 1982. The employment rate for the OECD comparison group aged 15 to 64 rose by 0.7 percentage points from a year earlier to 69.6%. This is also the highest figure for September since related statistics began in 1989.

Looking at employment by age group, those aged 60 and over increased by 354,000, those in their 30s by 56,000, and those in their 50s by 45,000. Conversely, those aged 20 and under decreased by 86,000, and those in their 40s by 58,000. Employment among the core generations supporting society and the economy, those aged 20 and under and those in their 40s, has decreased for 11 and 15 consecutive months, respectively. Seounju, Director of Social Statistics at Statistics Korea, explained, "Like other age groups, the population of those in their 40s is decreasing, but their economic activity participation rate is relatively high at 80.2%. In particular, the employment rate of men in their 40s is high at 90.7%, but since many of them are concentrated in manufacturing, construction, and retail sectors, they seem to have been more affected."

During the same period, the number of unemployed persons was 661,000, a decrease of 42,000 (6.0%) compared to the same month last year. This is the lowest level in 21 years since September 2002 (632,000). It is the second-lowest level on record. The unemployment rate, which is the proportion of unemployed persons among the economically active population, was 2.3%, down 0.1 percentage points from a year earlier. This is also the lowest level for September since the job search period criteria changed in June 1999.

Looking at the statistical indicators, despite the slowdown in growth rate, the employment rate is rising and the unemployment rate is decreasing. However, there are concerns that if this 'low growth-low unemployment' phenomenon prolongs, it could worsen the potential growth rate and lead to a decline in the quality of employment. The simultaneous decline in youth employment and unemployment rates last month is analyzed as a reduction in the number of youths entering the labor market rather than an improvement in employment conditions. The youth economic activity participation rate in September was 49.1%, down 0.5 percentage points from a year earlier.

The number of manufacturing sector employees, considered quality jobs, also decreased by 72,000 (1.6%) last month, marking the largest decline in five months since April (-97,000). Manufacturing employment has been declining for nine consecutive months. On the other hand, employment increased in health and social welfare services (118,000, 4.2%), professional, scientific and technical services (67,000, 5.2%), and accommodation and food services (66,000, 3.0%). Director Seo stated, "Among manufacturing employees, automobile and clothing sectors are increasing, but chemical and electronic parts sectors are decreasing. Although the number of manufacturing employees is on a continuous downward trend, the overall base effect must be considered as a reason for the decline."

Experts warned against the prolonged 'low growth-low unemployment' phenomenon. Professor Kim Sangbong of Hansung University’s Department of Economics said, "Recent employment rate indicators show an increase in the elderly aged 60 and over, while employment rates for those in their 20s and 40s continue to decline, indicating that the market is ultimately failing to create quality jobs." He advised, "The government urgently needs to prepare specific support measures for the reemployment of unemployed persons in these age groups."