Financial group employment is down

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Financial group employment is down


The government is trumpeting that the job market is improving this year, citing its own statistics, but the reality must be examined more closely if the government plans to implement the right policies to solve unemployment problems.

According to the government’s April employment report by Statistics Korea, the nation’s employment-to-population rate was at 65.4 percent, the highest since the number was first recorded in 1999.

The government said its efforts to create jobs are paying off as the employment rate has grown in the first four months of the year. Job creation is one of the Park Geun-hye administration’s top goals, and the government has set a goal of reaching an employment rate of 70 percent by 2017.

However, as opposed to the statistics, reality reveals many abnormalities in the job market.

In the financial sector, the number of newly-hired full-time workers started falling in February due to many financial companies’ decision to increase the number of part-time jobs to jibe with the government’s policy.

Samsung Securities transferred about 130 employees to other subsidiaries of Samsung in July because of management difficulties. The situation worsened after that, so the company implemented a voluntary retirement program last month. About 300 employees, or 11 percent of the total 2,700, have recently left the company.

Not only securities firms, but also banks and insurance companies are undergoing restructuring.

In general, thousands of highly-qualified workers have left the financial sector recently, with the trend increasing since February.

“It can be a serious problem because those leaving the market are mostly highly-educated regular workers,” said an official at the Ministry of Employment and Labor. The official described the current phenomenon as “kicking out a high-quality workforce.”

Until January, the financial industry was adding about 10,000 new jobs every month. In September, about 22,000 Koreans found jobs in the sector and at least 14,000 landed financial jobs in January.

“Because many financial institutions began restructuring late last year to go along with the government’s job creation policy, they are now creating part-time jobs while forcing regular workers to retire,” an official at one of the institutions said on condition of anonymity. “The statistics are a kind of optical illusion that makes the market seem as if it is really improving.”

The Employment Ministry official said the trend is likely to continue in the financial industry as banks continue to experience falling profits due to low interest rates after the global financial crisis, while securities firms suffer poor earnings due to passive investment decisions by private investors and decreased profits from commission fees as the Internet and mobile transaction services replace their roles.

“The employment situation in the sector will become worse in the coming months,” the official said.

The number of people who have given up on finding a job or who are not working is also on the rise.

The number of people who have stopped job hunting surged from 159,000 last April to 237,000 in January. Last month, the number jumped to nearly 370,000. The number of idle unemployed people reached nearly 860,000 in April.

These two groups are not counted in the government’s calculation of the unemployment rate, which means national unemployment may be worse than the government recognizes.

In the areas of technology services and science, the number of newly-employed people has been falling for 12 consecutive months.

In the two fields, about 30,000 to 50,000 employees are let go every month, the Employment Ministry said.

“The main causes of the decrease are conglomerates shedding jobs and retirement in the baby-boomer generation,” the official said.

But the number of new employees has shown remarkable growth in wholesale/retail, health care/social welfare and accommodation/restaurant facilities.

“The rising employment rate amid a decrease in high-quality workers in the market can be interpreted as good jobs are vanishing and poor jobs are thriving,” said Ryu Ki-jeong, director of social policy at the Korea Employers Federation. “This is a temporary result of the government policy, not the market situation,” he said, adding that “The government might decide to limit raising the employment rate if it cannot guarantee job quality.”

Youth unemployment is also a serious matter. The number of unemployed Koreans between the ages of 15 and 29 jumped from about 340,000 to 426,000 in the past year.

“It is impossible to keep increasing the employment rate while making no change in job types or working conditions,” said Kwon Soon-won, a professor at Sookmyung Women’s University. “The government needs to make a correction in its job creation policy in order to keep high-quality workers from being thrown away and prevent people from giving up on job-seeking.”


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