COVID-19 Swallowed Jobs for 210,000 People
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[경향신문]
Due to COVID-19, the number of people employed last year fell by the biggest margin since 1998, shortly after the Asian financial crisis. The nation’s unemployment rate was 4.0%, the highest since 2001 (4.0%). Such an impact on employment has been concentrated in in-person services and in non-regular, temporary jobs, fueling concerns that our society may witness polarization in employment take form in a K pattern, where the gap widens according to the industry and status of the workers.
According to the December 2020 and Yearly Employment Trend released by Statistics Korea on January 13, the number of people employed last year was slightly over 26.9 million, 218,000 lower than a year ago. This was the biggest drop in 22 years since 1998 (-1.27 million). So far, the annual employment figure had dropped only four times: in 1984 following the oil crisis, in 1998 after the Asian financial crisis, in 2003 due to the credit card crisis, and in 2009, the global financial crisis.
The employment crisis was apparent in in-person services. Employment decreased in retail and wholesale (-160,000), hotels and restaurants (-159,000) and education services (-86,000). Employment increased only in areas where demand grew due to COVID-19, such as health and social services (130,000) and transport and storage (51,000). Among wage earners, full-time workers such as regular workers increased by 305,000, but those with an unstable employment status, such as temporary workers and day laborers decreased by 313,000 and 101,000 respectively.
Business owners either looked after their businesses alone after releasing employees or closed their businesses. When it came to workers other than wage earners, the number of business owners without a separate employer increased by 90,000, while the number of business owners who had a separate employer decreased by 165,000. The number of people temporarily taking a break from work increased by 430,000 to 837,000, the biggest increase since relevant figures were first recorded in 1980. Young people particularly suffered a heavy blow when it came to jobs. The unemployment rate among people aged 15-29 was 9.0%, more than double the average (4.0%).
The Kyunghyang Shinmun confirmed that tax revenues from earned income tax decreased due to the record-breaking drop in employment, but the total amount still surpassed the government estimate. The earned income tax for January-November 2020 increased by 6% from the same period in the previous year, when it fell below the average of the past five years (10%). An official from the Ministry of Economy and Finance explained, “It’s because the employment shock was focused on low-income earners, who don’t pay earned income tax (38.9% of the total workers as of 2018).”
Experts are worried that the gap between industries could widen in the process of recovering from COVID-19. Kim Dae-il, a professor at Seoul National University said, “If a business owner closes his business, economic recovery can be slow,” and added, “We can only decrease the gap by concentrating government support on industries that witnessed their sales drop, instead of handing out disaster relief funds to all citizens.”
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