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Don’t cherry-pick the convincing data

Published: 12 Sep. 2024, 19:44

Appearing in the National Assembly earlier this week, Prime Minister Han Duck-soo highlighted the historic-high employment rate of 72.3 percent for those aged between 25 and 29. He cherry-picked the data to defend the government’s argument that the economy is recovering. The employment report is the sole positive economic data the government can come up with against the argument of an economy in the dumps.

According to the August payroll report by Statistics Korea, the ratio of the employed against the total population was 63.2 percent, a record high for the month of August. The employment of people aged over 15 increased by 123,000 from the previous month, sustaining growth above the 100,000 threshold for the second consecutive month. The employment ratio of people aged between 25 and 29, as the prime minister hyped, was a record high of 73 percent. The jobless rate fell to 1.9 percent, the lowest-ever. At first glance, Korea’s job market is doing well.

But a closer look at the situation tells a different story. The construction, retail and wholesale sectors continued to lose jobs due to sluggish domestic demand. The self-employed population has also been shrinking for seven straight months. The number of the employed between 15 and 29 — and that of those in their 40s — who are crucial to the labor force has been falling for 22 months and 26 months, respectively. Demographics may have played a part in the decline, but they alone cannot explain the slack.

The number of those “not working and no longer looking for jobs” increased by 245,000 from the same period a year ago to reach the highest for August. They are not counted in the economically active population. Their exit from the labor market can imply why the unemployment rate fell to the record low.

The historic-high employment rate for August also hides the reality. More than half of the employed last month, or 54.6 percent, were temporary hires working less than 36 hours a week. The number is the highest for August since 1982. The young are settling as temps due to the shortage of decent regular jobs and competition with the elderly aged over 60. The phenomenon partly reflects the young people’s bias toward the gig economy. But the real reason can be found in the growing offerings of irregular jobs and fewer opportunities for secure jobs.

Job security is essential for economic growth. It is instrumental for economic activities and feeds a benign cycle of growth. Without solving the job conundrum, Korea’s abysmal birthrate cannot be resolved. The government must not settle for headline data numbers. It must implement reforms in labor and industrial structure to breed lasting jobs and businesses.