Unemployment benefit payout hits record highThe number of people who received unemployment benefits and the amount they received hit a record high in the first quarter of 2018, a testament to the worsening job market.
According to Korea Employment Information Service statistics Sunday, the number of people who received unemployment benefits hit 628,000 during the January-March period, a 6.9 percent year-on-year jump.
It is the highest figure since the state-run service started aggregating quarterly data about unemployment in 2010.
The agency estimates that 1.49 trillion won ($1.39 billion) of unemployment benefits was distributed in the first quarter, a 16 percent year-on-year growth. This is also a record amount since quarterly data on unemployment benefits started to be aggregated in 2007.
People who lose their jobs receive unemployment benefits to maintain their living until they are re-hired.
Recent statistics from a separate agency showed that industries that have a lot of jobs paying the minimum wage have seen a significant increase in the number of people being put out of work and consequentially claiming unemployment benefits.
The Moon Jae-in administration increased the minimum wage rate to 7,530 won per hour starting this year, a 16.4 percent increase.
According to Statistics Korea, the number of people employed in temporary positions and part-time jobs decreased by 181,000 in the first quarter. The number of people employed in the retail and service sectors also dropped by 98,000 in the Jan.-March period this year.
The increased minimum wage also leads to higher retirement benefits, which in turn leads to higher unemployment benefits as the two rates are tied to each other. This partially explains why the number of people claiming unemployment benefits jumped in the first quarter.
According to local employment law, the minimum rate of retirement benefits is set at 90 percent of the minimum wage rate. Since the minimum wage rate jumped by 16.4 percent this year, the minimum rate of monthly retirement benefits also jumped from 46,584 won last year to 54,216 won this year.
In an unstable employment market, those who apply for retirement benefits are also showing continuous growth. In the month of March, those who applied for retirement benefits jumped by 13.1 percent year-on-year. In March 2017, the year-on-year growth rate for retirement benefits applications stopped at a mere 0.5 percent.
The government argued that the high number of people who receive retirement benefits signifies the strengthened social safety net.
BY JIN EUN-SOO [firstname.lastname@example.org]