New jobs rebound in Feb., but many are in public sector
But fundamental problems remain as the good jobs report largely depended on government hiring, especially of senior citizens, raising doubts about its sustainability.
According to Statistics Korea on Wednesday, 263,000 new jobs were created in February compared to the same month one year earlier. That is a huge boost from January’s 19,000 new jobs and represents the largest number of jobs added in 13 months. The last time the number of new jobs was at this level was in January 2018, when 334,000 new jobs were created.
Finance Minister Hong Nam-ki welcomed the news.
“I am glad to hear the number of new jobs has recovered to 200,000 in 13 months,” Hong said in a government meeting on Wednesday. “[The government] will continue to monitor the situation closely until it becomes clear that the improvement in the job market is gaining momentum.”
He added that the government will continue to push forward policies that would revitalize job opportunities in the private sector including measures to boost exports, encourage innovation in industries and energize investments.
“We will not be sensitive to every monthly report [in pushing our policies],” Hong said. “By analyzing the job market situation thoroughly and strengthening customized policies, we will target job areas that have been weakening.”
The jobs created last month were largely in health and social welfare services, which are heavily funded by the government. While jobs grew for people in their 60s or older, the number fell for people in their 30s and 40s.
Last month, health and social welfare services added 237,000 new jobs, the largest among all sectors. This was also the sharpest year-on-year increase, 12.9 percent, compared to other areas.
Agriculture and fisheries trailed with 117,000 new jobs, increasing 11.8 percent. The health and social welfare jobs account for 7.9 percent of the total number of people employed in Korea while the agriculture and fisheries industry accounts for 4.2 percent.
Manufacturing accounts for 16.7 percent of people employed in Korea and it saw a decline of 151,000 jobs, a 3.3 percent decline.
Although that number was smaller than the 170,000 people who lost their jobs in January, the manufacturing industry has been on a continuous decline for 11 consecutive months. The last time it saw an increase in the number of jobs was in March 2018.
Korea’s major manufacturing industries such as automobiles and shipbuilding have been laying off its employees, including the closing of GM Daewoo’s production plant last May.
Manufacturing wasn’t the only sector with a declining workforce.
The wholesale and retail sector, which is the second largest in terms of jobs accounting for 14 percent of all employment, lost 60,000 jobs in February, down 1.6 percent compared to the previous year.
That was also the second-largest amount of lost jobs by sector.
The financial and insurance industry lost 38,000 jobs, a 4.5 percent decline. The number of new jobs for people in their 60s or older stood out last month.
Some 397,000 people 60 or older landed jobs. This is the biggest number of people in that age group that landed jobs since July 1983 - 36 years ago.
On the flip side, 115,000 people in their 30s lost jobs in February while the number of people in their 40s were down by 128,000.
“The increase in [jobs for] people who are 60 years old or older contributed significantly to last month’s job increase,” said Jeong Dong-wook, head of employment statistics division for Statistics Korea. “Also the number of [jobs for] young people increased 21,000.”
Jeong said the significant increase of work for people 60 or older was due to the start of Health and Welfare Ministry programs last month that hire senior citizens, which is estimated to be adding around 250,000 jobs.
“It seems that the number of people hired in positions in health and social welfare, public administrative works and national defense has boosted the total number,” Jeong said.
But he noted other positive signs in information technology and telecoms jobs.
“The information and telecommunications industry, which also includes mobile apps, contributed to the overall increase,” Jeong said.
Last month, the information and telecommunications industry jobs added 72,000 jobs, a 9 percent increase.
Jeong said the lodgings and restaurant industry, which has been losing jobs, added 1,000 new jobs last month. The industry accounts for 8 percent of all jobs.
“While manufacturing and wholesale and retail saw their work forces shrink, the number of job lost in those industry slowed, and areas that have maintained increases remain strong,” Jeong said.
There have been growing concerns about the need to improve the job situation in the private sector.
The job report came a day after an International Monetary Fund Korean mission that evaluated Korea’s economy and policies called for the government to come up with a supplementary budget that’s no less than 0.5 percent of the country’s GDP - a minimum of 8 trillion won ($7 billion) - in order to counter headwinds that may drive down the nation’s economic growth, which is targeted this year at 2.6 percent.
Tarhan Feyzioglu, the mission’s leader, during a press conference Tuesday noted that while he was confident of Korea’s economic growth and the government’s competence in macroprudential policies, Korea’s weakening potential growth was a problem along with widening income inequality and the bad jobs situation.
“We genuinely believe the government’s target of 2.6 to 2.7 percent is feasible this year,” Feyzioglu said Tuesday, “provided that there’s a large supplementary budget.”
Finance Minister Hong announced a government plan to boost investment from the private sector on Wednesday.
“In order to create jobs, vitalizing private investments and innovative growth is most important,” Hong said.
He said the government will advance the building of 13 infrastructure projects funded by the private sector including a highway connecting Pyeongtaek in Gyeonggi and Iksan in North Jeolla that was initially scheduled to break ground after 2020.
The 13 projects are estimated to be worth 12.6 trillion won.
Hong also said the government will be working on reforming private investment laws within this month to help create a 1.5 trillion won or larger private investment market by lifting restrictions on private investments in public infrastructure projects.
BY LEE HO-JEONG [firstname.lastname@example.org]