Korean Economy News
Korea’s job growth stops at 3,000 in Aug, 200,000 jobs lost from consumer services

By Lee Yu-sup and Lee Ha-yeon

South Korean job conditions continue to worsen at an alarming pace with payroll additions in August shrinking to one-hundredth of a year-ago level and the number of unemployed hitting the largest ever since the aftermath of the Asian financial crisis of late 1990s.

According to data released by Statistics Korea on Wednesday, the number of employed in August was tallied at 26,907,000, adding 3,000 from the same month last year. The stagnancy in the job market is the worst since the number of payroll shrank 10,000 in January following the 2008-2009 global financial crisis.

Monthly job growth averaged above 300,000 throughout last year. The job curve hit downward spiral ever since the minimum wage went up by 16.4 percent from January, skidding to 5,000 in July from 104,000 in February. The downward trend accelerated again in August as workweek cutback to 52 hours from 68 expanded to all worksites employing 300 or more from July.

The manufacturing sector shed 105,000 jobs in August. The services sector where self-employed businesses are focused became more fragile. The wholesale and retail sector lost 123,000 jobs on year, and the restaurant and accommodations sector 79,000 jobs.

The number of unemployed increased by 134,000 to 1,133,000 in August, the largest jobless tally since massive layoffs in 1999 due to industry-wide restructuring following an international bailout.

The jobless rate added 0.4 percentage point on year to 4.0 percent. The unemployment rate of the youth aged between 15 and 29 hit 10.0 percent, also the highest since crisis-hit period of 1999.

Another disastrous job data will likely put more pressure on the liberal government which refuses to bend its economic policy direction of inflating wages and income to generate growth for the economy.

The markets took the alarming job data in strides as data in recent months consistently painted a receding economy. The main Kospi ended 0.01 percent down at 2,282.92 on Wednesday, and the Korean won fell 3.3 to close at 1128.6 against the U.S. dollar.

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