The employment rate graph is sloping upward, but the youth are on the verge of ‘failure’

Employment rate is ‘highest ever’, number of elderly employed increases significantly
With the economy shrinking, the number of young people and those in their 40s employed is on the decline
Employment rate driven by the elderly and women, “Isn’t it actually an ‘imaginary number’?”

Last year, the annual number of employed people increased by more than 30, and the employment rate also reached an all-time high. However, as the number of employed people decreases among the youth (15 to 29 years old) and those in their 40s, who are the main force in the economy, and the number of employed people increases significantly among those in their 60s or older, some say that this is in fact an imaginary number. As the economic recession continues, the number of employed people has increased, and the number of quality jobs has decreased. In the end, only the numerical employment rate increased, but the reality is a bleak situation.

Employment rate increases by 0.5% point, but youth employment rate actually ‘falls’

The National Statistical Office announced on the 10th through ‘December 2023 and Annual Employment Trends’ that the annual number of employed people last year was 12. This is an increase of 2,841 people compared to a year ago. The annual increase in the number of employed people has increased by 6,000 to 1 since 32 (7,000) ▲2014 (59) ▲8,000 (2015) ▲28 (1,000) It showed a wide range, but then fell until 2016 (23 people). Then, it succeeded in rebounding to 1,000 in 2017, but as the novel coronavirus infection (Corona 31) situation spread, the number decreased again to 6,000 in 20. Afterwards, it showed a favorable trend in 30 (2018 people) and ▲9 (7,000 people). Regarding this, Seo Un-joo, Director of the Social Statistics Bureau at Statistics Korea, said, “Although it has slowed down compared to 2019 when the effects of the COVID-30 pandemic were noticeable, the overall number of employed people is increasing.” He added, “The number of employed people is increasing due to increased demand for care and increased referral activities due to recovery from daily life.” “It has continued for three consecutive years,” he explained.

By industry, there was an increase in the health and social welfare services industry (+14 people), the accommodation and restaurant industry (+3,000 people), and the professional science and technology services industry (+11 people). On the other hand, manufacturing (-4,000 people), wholesale and retail industry (-7 people), and real estate industry (-4 people) showed a decrease. By age, those aged 3,000 or older increased by 3, driving the increase in the overall number of employed people. The number of people in their 7,000s and 1s also increased by 8,000 and 60, respectively. On the other hand, there was a decrease of 36 people in their 6,000s and 50 people in their 30s. By occupational status, the number of regular workers among wage earners increased by 5, but the number of daily workers and temporary workers decreased by 9,000 and 5, respectively. Among non-wage workers, the number of self-employed workers with employees increased by 4,000 and the number of self-employed workers without employees increased by 20, but the number of unpaid family workers decreased by 8.

Overall, last year’s overall employment rate, which is the percentage of employed people among the population aged 15 or older, was 62.6%, up 0.5 percentage points (p) from the previous year. This is the highest level ever since annual employment rate statistics were compiled in 1963. The employment rate for those aged 15 to 64, based on Organization for Economic Co-operation and Development (OECD) standards, was 69.2%, up 0.7 percentage points from the previous year. This is also the highest since related statistics were compiled in 1989. However, the employment rate of youth aged 15 to 29 was 46.5%, down 0.1 percentage points from the previous year. By gender, the male employment rate was 71.3%, down 71.5 percentage points from the previous year (0.2%), and the female employment rate was 54.1%, up 52.9 percentage points from the previous year (1.2%). For men, it decreased in those in their 30s and 40s, but for women, it showed an increase in those in their 30s and over 60 years of age.

Why the continuing ‘employment surprise’?

The number of unemployed people last year was 78, a decrease of 7,000 from the previous year. As a result, the unemployment rate, which is the proportion of the unemployed among the economically active population, was 4%, down 6,000 percentage points from the previous year. An unemployment rate in the 2.7% range is a figure that is difficult to imagine exceeding the full employment level (natural unemployment rate in the early 0.2% range). However, experts are of the opinion that this cannot be interpreted only positively. This is because there is a hidden ‘employment puzzle’ that is difficult to identify by simply comparing numbers. In particular, employment indicators usually lag behind the economy in the manufacturing industry (with a lag of 2 to 3 months) and tend to follow the economy in the service industry. Even though the real growth rate in the first half of 6 was only 12% (compared to the same period of the previous year) due to the sluggish export and manufacturing economy, there is an ’employment surprise’. ‘ is notable in that it continues.

Women and the elderly played a significant role in the increase in employment despite the economic recession. Elderly employment is increasing both for women and men, especially among those in their 60s. Retired, highly educated baby boomers (in their 60s) continue to have a desire to work due to their longer average lifespan and improved health. Among women in their 30s without children, employment is increasing significantly. In a way, unemployment in the 2% range reflects the scars of our society’s low birth rate. The increase in demand for women and the elderly due to the decline in labor productivity also contributed to the increase in public demand. Since approximately the early 2010s, labor productivity in Korea’s manufacturing industry has been on a downward trend. As the amount of labor required to produce the same quantity of products as before is limited by the 40-hour workweek and 52-hour workweek restrictions, the employment pool has expanded to include women and the elderly.

Concerns about decline in job quality become visible

To summarize, the conclusion is that the increase in employment in 2023 is more about ‘preserving jobs for women and the elderly’ than resolving the employment problem of the youth. As mentioned, the youth employment rate according to the indicators has actually decreased. In addition, the decline in employment in manufacturing, wholesale and retail, and real estate industries, which are classified as high-quality jobs by industry, is quite painful. The only positive phenomenon seen in this turbulent society is the increase in female employment. However, it is difficult to boldly say that even this is an effect of creating jobs for women, as many believe that those who were ‘forced out’ after experiencing social difficulties such as the COVID-19 pandemic are in a hurry to look for jobs, even if they are of somewhat lower quality. In fact, according to the National Statistical Office, the industries in which married women work the most are the health and social welfare services industry (18.2%), the education service industry (16.1%), the wholesale and retail industry (12.9%), and the lodging and restaurant industry (7.4%), with relatively high average wages. It belongs to a low field.

Meanwhile, the Federation of Korean Industries (FKI) predicted that the job market will become more difficult in the future. As internal and external economic uncertainty deepens, such as a prolonged recession, high interest rates, and high exchange rates, companies’ hiring plans are becoming uncertain. In fact, according to the Federation of Korean Industries, 64.6% of companies that responded to the survey responded that they had not established a plan for new hiring or would not hire new employees. 65.4% of companies had plans to hire, but the scale of their hiring was also expected to decrease. This is because only 57.8% of companies said they would maintain hiring at a similar level compared to the previous year, while 24.4% said they would reduce it. The number of companies that responded that they would increase hiring was the lowest at 17.8%. The most common reason for companies to be more passive in hiring compared to last year was ‘initiating austerity management to respond to worsening profitability and management uncertainty’ (25.3%). Next, they mentioned △ economic deterioration due to the prolonged global economic recession, high interest rates and high exchange rates, etc. (19.0%) △ cost reduction in preparation for rising raw material prices and increased labor costs (15.2%).

As the ‘job mismatch’ phenomenon continues, where companies are unable to find the talent they want, there are also concerns that there will be negative news in the employment market. In a survey by the Federation of Korean Industries, companies cited ‘difficulty finding suitable talent (30.9%)’ as the most common difficulty in hiring new employees. In fact, as of the first half of last year, the number of employees who actively sought talent but were unable to hire (unfilled employees) at workplaces with 300 or more employees amounted to about 1. This is twice the number in the first half of 2,000 (about 2020 people). Choo Kwang-ho, head of the Economy and Industry Division of the Federation of Korean Industries, said, “Recently, companies are maintaining a conservative approach in hiring due to worsening management performance due to the economic downturn, instability in the Chinese economy, and increased management uncertainties such as high interest rates and high exchange rates.” He raised his voice, saying, “There is a need to expand employment capacity through institutional support for corporate vitality, such as reform and tax burden relief.”