Now even manufacturing industry… ‘Recruitment shock’ under growth engine
Kwon Dae Gyung | kwon213@ | 2018-05-17 10:48:42

The increase in the number of employed workers has stopped at 100,000 for the third consecutive month because of the increase in the minimum wage in the manufacturing recession. Concerns are mounting that the economy will lose its growth momentum in the medium to long term with the signs of prolonged employment shocks.

According to the National Statistical Office`s "April Employment Trend" on May 16, the number of employed workers rose 26 % from last year to 26,886,000, up from 123,000 a year earlier. The increase in the number of employed workers reached 100,000 in February. It recorded 334,000 people in January, with 104,000 people in February and 112,000 people in March.

It is the first time since the global financial crisis that the increase in the number of employed workers for the third consecutive month has remained at 100,000. It remained at or below 100,000 by February 2010 from 177,000 in August 2008. However, it was still higher than now.

The employment rate dropped to 60.9 % from 0.1 % a year earlier due to a decrease in the number of employed workers. The employment rate for the 15-64 age groups, which is based on the Organization for Economic Cooperation and Development (OECD), stood at 66.6%. Especially, the deterioration of manufacturing has become prominent. The manufacturing sector which has seen an increase in employment for 10 consecutive months since June 2017, dropped by 68,000 last month, leading to a decline in overall employment. The employment situation of other transportation equipment manufacturing, medical, precision, optics and watch manufacturing industries including shipbuilding was bad and the construction industry did not survive the recession. In the case of the construction industry, the increase in the average number of employed workers was 119,000 last year. The minimum wage increase and the decline in Chinese tourists also reduced the number of people employed in the lodging and restaurant industry by 28,000.

Employment Statistics Department head Hwang Hyun-joon pointed out, "The effect of the restructuring of the shipbuilding industry has affected the manufacturing industry. Even in the manufacturing industry, production indexes fell poorly in February and March.”

Experts are concerned that the job market may be in a state of shock over the adjustment phase. It is becoming increasingly clear that if the government`s policy system is not checked immediately, the growth engine of the Korean economy will be completely lost.

Kim Ki-heung, a professor of economics at Gyeonggi University, stated, "The dismissal of minors due to the rise in minimum wage is the biggest cause of poor employment," the government mentioned.” Also, Professor Kim advised that "corporate-friendly policies should enable companies to create jobs by stimulating investment."

By Sejong= Kwon Dae Gyung kwon213@

[ copyright ⓒ The Digitaltimes ]