Published : 2013-03-15 20:40
Updated : 2013-03-15 20:40
The February employment indicators are nothing short of abysmal ― the smallest increase in the number of employed people in three years, the highest jobless rate for young people in 23 months and a sharp decline in the number of self-employed people. No less discouraging is a continued decline in the economically active population as a percentage of the working-age population.
According to a Wednesday report from Statistics Korea, the February number of working people marked the smallest year-on-year increase, 201,000, since February 2010. The increase had continued to slow since it peaked at 685,000 last September.
Statistics Korea and the Ministry of Strategy and Finance agreed that the increase was smaller than expected because many of the day laborers were not counted, with the Lunar New Year holiday included in the survey period. True enough. But a deepening slump and the mismatch between the kinds of jobs sought and those offered should be a more convincing explanation.
As always, those most affected by the freezing job market were young people. The employment environment for those aged 20 to 29 went from bad to worse. In this age group, the number of employed people dropped by 159,000 on a year-on-year basis ― the largest since March 2009. The jobless rate for those aged 20 to 29 was at 9 percent, the highest since March 2011.
A growing number of young people are giving up on their pursuit of jobs as they are not easily available, as indicated by the economically active population as a percentage of the total age group. The percentage was the lowest at 60.7 percent since June 1999, except for last December with 60.6 percent.
Their dismal employment prospects have grave ramifications. Most notable among them are decreases in birthrates, productivity and growth potential ― serious problems for a nation with a fast aging population.
When they remain unemployed or have no decent job, young people tend to delay getting married. Some of them choose to remain single when they are hired, if their employment is deemed insecure. When married, many young people do not want to have babies if they are worried about their chances of steady employment. Moreover, child care and education are costly.
No wonder, the birthrate in Korea is one of the lowest in the world and well below the replacement level. The low birthrate not just turns the nation into a fast graying society but lowers its growth potential as well.
Another indication of the worsening economic condition is a decline in the economically active population as a percentage of the entire working-age population, or the group of people aged 15 to 64. Statistics Korea says the percentage is expected to fall below the 60 percent level for the first time this year.
In the past, the percentage has stayed above the 60 percent level as the baby boomers, those born during the 1955-63 period, have remained economically active and a growing number of women have been entering the job market.
But the percentage, Statistics Korea says, is expected to fall to 59.3 percent this year, as the baby boomers are leaving work, with the retiring age set at 55 to 58 at many workplaces. The slide is expected to accelerate in the years ahead. Of course, the main reason is that the population is aging quickly.
If it is to keep the economic momentum going, the nation will have to increase the portion of the economically active population in the working-age population. There are several ways to do so, with relying on foreign countries for the provision of labor being one of them.
But among the more preferable and easier ways are raising the retirement age to 65, as is the case in other countries, and providing greater incentives to women to work. According to one study, an increase in the population of economically active women as a percentage of the working-age population of women from the current 55 to the OECD average of 65 percent would mean an additional 1.3 million workers.
While it is necessary to expand the pool of active and potential workers in the long term, one of the immediate concerns to the nation is what to do with not just young people in search of jobs but an increasing number of jobless baby boomers. Many of them look to President Park Geun-hye, who promised to raise the portion of employed people in the working-age population to 70 percent.