The number of people at work has fallen at the fastest rate in almost 21 years as stores, restaurants have come under fire from COVID.
South Korea’s unemployment rate hit an 11-year high in December, while the number of employed people plunged at the fastest rate in more than 20 years, as strict COVID-19 restrictions in the country have stepped up the pressure on businesses.
The seasonally adjusted unemployment rate – which takes into account public holidays, calendar variations and weather among other factors – rose to 4.6% in the last month of 2020, from 4.1% in November and the worst since January 2010.
For 2020 as a whole, it stood at 4%, the highest since 2001, Statistics Korea data showed on Wednesday.
Data also showed the number of employees was 26.5 million in December, 628,000 less than a year earlier, marking the 10th consecutive monthly decline and the worst recession since February 1999.
“Damage to retail, accommodation and food service businesses was the biggest strain on December’s figures,” a Statistics Korea official told Reuters news agency.
The outages showed workers at retailers, accommodation establishments and restaurants were the hardest hit last month, with the number of new jobs falling by 511,000 from the previous year.
Those of manufacturers were also badly affected, with the number of new jobs falling by 110,000 year on year.
South Korea increased its social distancing measures for the Seoul metropolitan area by enforcing a ban on gatherings of more than 50 people and closing most businesses, including restaurants, at 9 p.m. on December 8 .
Reduced hours for most stores and the closure of karaoke parlors and other businesses where the spread of disease is more likely to have injured service sector workers, especially during the holiday season.
Daily virus cases hit a record high in late December, resulting in further restrictions, but this has slowed in recent days, thanks to the country’s aggressive tracking and testing system.
South Korean President Moon Jae-in pledged last week to expand support for those vulnerable to job insecurity, including temporary workers, day workers and youth.
Asia’s fourth-largest economy is expected to shrink in 2020, the first contraction in 22 years, even as the government rolled out around 310 trillion won ($ 283.28 billion) in stimulus last year. Preliminary gross domestic product (GDP) 2020 data will be released later this month by the Bank of Korea (BOK).
The worst job losses since the Asian financial crisis of the late 1990s may further encourage the BOK to put more emphasis on jobs in monetary policy making. The BOK is expected to keep rates at an all time high at its Friday meeting.
The deteriorating labor market is also increasing pressure on government and legislators to come up with more ways to support the economy.
Finance Minister Hong Nam-ki, in a statement, said the difficulties in the labor market are expected to persist until February and pledged to do more to combat them.
Moon’s administration already plans to give 4.6 trillion won ($ 4.2 billion) in cash to millions of South Koreans ahead of next month’s Lunar New Year holiday and anticipated budget spending in the first half of the year. of the year.