[Why&Next] Excluding Workers Aged 60 and Over, Employment Shows 'Negative'... The Hidden Side of the Highest Employment Rate Ever

Employment increased by 261,000
with 292,000 aged 60 and over
Even these are short-term senior jobs created by taxes
Part-time workers who worked 1 hour are also counted as employed
Does not reflect the qualitative aspect of employment

The number of employed people increased by 261,000 compared to a year ago last month. The employment rate (63.0%) also recorded the highest level ever for April since monthly statistics began in July 1982, and the unemployment rate improved to 3%, close to full employment, showing improvement in all three major employment indicators. The government expressed optimism, stating that "a solid employment trend continues due to favorable exports and other factors." At first glance, it seems that the employment boom is continuing.

However, looking beneath the statistics, the situation changes. The number of employed people aged 60 and over increased by 292,000, greatly exceeding the total employment increase of 261,000. This means that without the elderly aged 60 and over, employment would have decreased. In fact, the number of employed people in their 40s, who play a central role in the Korean economy, decreased by 90,000 compared to a year ago, the largest decline among age groups. The youth, who should be most active in working, decreased by 89,000, marking 18 consecutive months of decline.

This is why there are criticisms that employment and employment rate indicators are detached from the employment situation of the core labor population. The government has explained the decrease in employment among youth and those in their 40s as an inevitable phenomenon due to population decline in those age groups. However, the April statistics are difficult to explain solely by demographic changes. For example, the decrease in employed men in their 40s (87,000) far exceeded the population decline in the same age group (66,000).

The increase in April employment filled by elderly jobs was largely influenced by short-term jobs created through taxes. The government aims to create 1,142,000 direct jobs for the elderly and others in the first half of this year, producing an average of 190,000 jobs per month. In fact, health and social welfare services (93,000), classified as public jobs, along with manufacturing (100,000), led the increase in employment.

On the other hand, domestic jobs created by the private sector showed sluggish trends. Business facility management and business support rental services (66,000), wholesale and retail trade (39,000), and real estate (23,000) all decreased simultaneously. Professor Kim Sangbong of Hansung University’s Department of Economics pointed out, "As the government increased public jobs and invested finances in social overhead capital (SOC) projects, temporary jobs for the elderly and construction workers increased. It is difficult to regard this as an employment boom."

In fact, analyzing the April employment data by working hours shows that the number of employed people working less than 36 hours per week was 6,352,000, an increase of 365,000 (6.1%) compared to a year ago. Meanwhile, those working 36 hours or more per week were 21,978,000, a decrease of 94,000 (-0.4%). This means only short-term jobs working less than 36 hours per week increased.

Given this situation, the number of half-employed workers (underemployed) who are working short-term jobs but want to work additional hours and are seeking employment has not decreased. In the April statistics, the number of people available for additional work related to time was 739,000, fluctuating between 700,000 and 800,000 since January (726,000), February (831,000), and March (739,000), showing a stagnant trend.

Joseph Han, a research fellow at the Korea Development Institute (KDI), diagnosed, "Underemployed workers are not considered unemployed in statistics, so if the number of underemployed workers remains high or increases for a long time, the unemployment rate appears not to be bad." This explains why the unemployment rate remains near 3%, close to full employment, despite poor actual employment conditions due to sluggish domestic demand and worsening corporate management.

On the 12th, job seekers continued to visit the Seoul Western Employment Welfare Plus Center in Mapo-gu, Seoul. According to the 'July Employment Trends' announced by Statistics Korea on the same day, the number of employed people last month was 27,106,000, a decrease of 277,000 compared to one year ago. This marks the fifth consecutive month of decline, the longest streak in 11 years since the global financial crisis caused an eight-month consecutive decrease from January to August 2009. Photo by Kim Hyun-min kimhyun81@

A bigger problem is that the youth, who should be actively working, are being excluded from the employment market. The youth unemployment rate in April was 6.8%, up 0.4 percentage points from the same month last year, and the number of unemployed youth increased the most in 3 years and 2 months. The number of unemployed youth has been rising for six consecutive months since November last year. As of August last year, the proportion of non-regular workers among youth was 19.4%. This means that one in five young people is working insecurely on contracts of two years or less and low wages. A research fellow analyzed, "Although the youth employment situation seems quantitatively favorable, qualitatively it remains vulnerable. When examining whether young people are entering jobs that can serve as a ‘career ladder’ they desire, it cannot be said that the current youth employment situation is improving."

So why does the gap between official indicators and actual perception occur? The government classifies anyone who worked for at least one hour as employed. For example, a job seeker who did not work for a month but worked one hour as a delivery part-timer is classified as employed by Statistics Korea. Although nominally employed, the person perceives themselves as unemployed. The statistics do not reflect qualitative aspects of employment such as employment type or age group.

Experts recommend removing statistical illusions and focusing government measures on qualitative aspects rather than quantity in the long term. Professor Lee Yunsu of Sogang University’s Department of Economics emphasized, "Policies focused on quantitatively increasing job numbers have resulted in producing only low-wage, unstable jobs. Instead of focusing on raising the number of employed people or the employment rate, it is time to develop policies from a longer-term perspective that support job-seeking activities to transition to proper jobs."