Employment in Information and Communications Increased... But Enrollment in Employment Insurance Decreased Instead

Increase in Information and Communication Employment Hits Highest Since 2022
Number of Employment Insurance Subscribers Widens Decline from March

Result Reflecting Characteristics of Digitalization and Information Communication Industry
Concerns Also Raised Regarding Quality of Jobs

Despite an increase in employment in the information and communication sector, which encompasses publishing, broadcasting, video production, and IT, the number of people enrolled in employment insurance has been declining. While the growth rate of employed persons has gradually increased, the number of insured individuals has steadily decreased in the second half of the year, widening the gap. Although this trend is interpreted as reflecting industry characteristics such as the rise of freelancers and one-person self-employed workers, concerns have also been raised that the quality of employment is deteriorating.

According to Statistics Korea on the 17th, the number of employed persons in the information and communication sector stood at 1,144,000 at the end of last month, an increase of 105,000 (10.1%) compared to the same period last year. This is the largest increase since February 2022 (128,000). The growth rate was also the highest among industries that saw an increase in employment this month.

The number of employed persons in the information and communication industry has been on the rise in recent years. Last year, the growth rate was 5.8%, which was relatively high compared to other industries. This year, the monthly growth rate ranged from 4% to 9%. The increase accelerated from May (4.5%), June (7.2%), July (7.8%), August (9.7%), and continued through last month.

On the other hand, the number of employment insurance subscribers in the information and communication sector has decreased this year. According to the Ministry of Employment and Labor, the number of employment insurance subscribers last month was 793,000, down 14,000 (1.8%) from the same period last year. After recording a growth rate of over 6% early last year, the number has continuously declined and has been negative since March (-0.3%). The decline is also deepening.

While the number of employment insurance subscribers should increase as the number of employed persons rises, an inverse phenomenon has occurred. Although there are some differences in aggregation and classification methods between the Ministry of Employment and Labor and Statistics Korea, no definitive analysis has been made regarding the widening gap between the two indicators. This is why related government agencies are investigating the background.

Several possibilities have been suggested to explain the discrepancy between the number of employed persons and employment insurance subscribers. One of them is the characteristics of the information and communication industry. Fields such as IT and broadcasting have a considerable number of workers, like freelancers, who do not enroll in employment insurance, which may have caused this phenomenon. The increase in new types of one-person businesses without employees, such as social networking service (SNS) video producers and YouTubers, due to digitalization, may also be a factor.

Yang Jun-mo, a professor of economics at Yonsei University, said, "The number of employment insurance subscribers includes those who receive the four major social insurance benefits as employees," adding, "The number of employed persons can be interpreted as including self-employed individuals and freelancers without employees." He continued, "Recently, amid a sluggish economy, the minimum wage has increased, and the burden related to the four major insurances has grown, so there are quite a few self-employed people without employees," adding, "This trend is a natural progression."

However, since jobs eligible for employment insurance can be considered relatively good-quality jobs, there are calls to carefully examine this change in figures. Within the government, there are opinions that "although it is fortunate that the number of employed persons is increasing, caution is needed as there are concerns." The government has recently been improving the four major insurances to strengthen social security and is trying to raise the employment insurance subscription rate to support vulnerable jobs such as those in the construction industry.

Meanwhile, according to the "Labor Market Trends Based on Employment Administration Statistics for September 2024" recently announced by the Ministry of Employment and Labor, the number of employment insurance subscribers among youth aged 29 and under was 2,354,000 as of the end of last month, a decrease of 113,000 (4.6%) compared to the same month last year. This marks the largest decline since the related statistics were first compiled, due to a decrease in the youth population and a reduction in employment insurance subscribers in the information and communication sector (23,000).