259,000 jobs added in May, but key categories still weak
But below the headline numbers, the situation is not as positive as it may at first seem.
Once the government-funded jobs for older people are stripped out, most of the growth vanishes. In two important areas - middle-aged people who need jobs to save for retirement and manufacturing jobs - the numbers are down. Not much growth has occurred in the private sector.
Statistics Korea reported Wednesday that the country added 259,000 jobs in May from the same month the previous year, boosting this year’s average number of jobs added per month to nearly 200,000.
The country’s monthly job creation number was at an average of 97,000 last year, compared to 316,000 in 2017.
“The number of employed has exceeded initial target of 150,000 … with the average in the past four months at 236,000,” said Minister of Economy and Finance Hong Nam-ki on Wednesday discussing the country’s economic situation and policies at the Sejong government complex.
“[The situation] is gradually coming out of the slumped job trend of last year, and the impact from government policies is starting to show,” added Hong.
In the restaurant and lodging category, a total of 60,000 jobs were added last month. These businesses have been heavily hit by the rise in the minimum wage, with the number of jobs falling for 20 consecutive months from June 2017. The statistics agency credited the return of Chinese tourists for the rise in jobs.
Jobs in the manufacturing sector decreased for the 14th consecutive month. Manufacturing jobs last month fell by 73,000 on year. In the previous month, the sector lost 52,000 jobs.
Statistics Korea said the decline in manufacturing was largely due to weaknesses in the electric and electronics sub-sector, which includes semiconductors as well as wired and wireless telecommunications equipment companies.
Since the beginning of this year, the semiconductor industry has been struggling, especially with exports continually falling. Exports of semiconductors in May declined more than 30 percent compared to a year ago.
Data indicate a strong job market for the elderly, a stark contrast from the situation for those in their 30s and 40s, who have traditionally been the most active in the market to support their families.
Jobs for those over 60 increased by 354,000 last month, while jobs for those over 65, usually retirees, rose by 200,000.
The statistics agency said jobs in the public sector for the elderly, such as in libraries, have been on the rise.
The number of employed in their 30s fell by 73,000 last month from the previous year, while the number of employed in the 40s dropped by 177,000.
The jobless rate remained in the 4 percent range for the fifth consecutive month, making it the longest streak since the currency crisis in the late 90s and early 2000s.
The statistics agency reported that the number of people unemployed last month was 1.145 million, with the unemployment rate at 4 percent.
“With the decrease in jobs for those in their 30s and 40s and in the manufacturing sector and with growing uncertainties abroad, there is a need to keep an eye on the employment situation,” Hong explained.
The finance minister said the government is working on plans for the second half of this year that will not only boost the economy but also increase the number of jobs in the private sector.
The policy direction, which will include a 10 trillion won ($8.4 billion) investment project, will be announced later this month.
“The improvement in the economic situation is the highest priority,” Hong said.
The finance minister expressed his frustration with the delay of the 6.7 trillion won supplementary budget approval by lawmakers.
“We’ve been doing our best to revitalize the economy, and it’s been 50 days since we submitted the supplementary budget to the National Assembly,” Hong said. “Yet the date to review the budget has not yet been decided.”
He said if the supplementary budget continues to be delayed, the economy could be harmed.
“I, once again, with desperation, ask the National Assembly to actively cooperate so that the supplementary budget could be passed swiftly so that we do not miss an opportunity for economic recovery,” Hong said.
BY CHAE YUN-HWAN [email@example.com]
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