(Bloomberg) -- South Korea’s employment rate hit a record high in 2019, offering President Moon Jae-in evidence that he is delivering on his pledge to provide more jobs, ahead of a parliamentary election.
The employment rate climbed to 60.9% last year, matching a previous high set in 1997, statistics office data showed Wednesday. At first glance, the rate, boosted by an increase in part-time work, appears to contradict the view among Moon’s opponents and some economists that his policies, including a higher minimum wage strategy, have priced people out of work.
The number is a rare slice of good news for Moon, whose party faces a mid-term election in April amid questions over his purging of prosecutors looking into corruption and his handling of the economy. Moon’s own term as president lasts until 2022.
“It’s a very meaningful result achieved despite the difficult circumstances of the shrinking working population,” Finance Minister Hong Nam-ki said in comments posted on a government website.
Still, the jobs growth relied heavily on part-time and elderly workers, who are generally paid less and have less stable positions, a fact which casts doubt on the real strength of the recovery in the labor market and its effectiveness in boosting consumption.
The number of employees working 17 hours or less per week increased by 19.8% in 2019, while those working 36 hours or more rose by 0.5%, Wednesday’s report showed. The economy added 377,000 jobs for seniors 60 or older, but there were 215,000 fewer positions for people in the prime working ages of 30-49.
“If you just look at the headline figure, the numbers seem to have improved, but a breakdown shows jobs for the core age group and the key manufacturing sector aren’t getting any better,” economist An Young-jin at SK Securities said before the data.
“Jobs data should be better in 2020 considering the bigger budget and an expected economic recovery, but I doubt whether the improvement will be sustainable enough to support wages and income,” he said.
For December, the jobless rate rose to 3.8% from 3.6% a month earlier. The number worsened for a fourth straight month, but was still well below the 4.4% marked at the start of 2019.
What Bloomberg’s Economist Says
“South Korea’s labor market remained buoyant in December, reflecting continued government job-creation efforts and an ongoing recovery in the hospitality sector. But the reading also masks persistent losses in the core retail and manufacturing sectors... Until employment in those core industries stabilizes, we continue to question the sustainability of the job market recovery and its ability to lift wages and consumption.”
--Justin Jimenez, economist
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(Adds comment from finance minister, detail throughout.)
--With assistance from Jaehyun Eom.
To contact the reporters on this story: Jiyeun Lee in Hong Kong at email@example.com;Sam Kim in Seoul at firstname.lastname@example.org
To contact the editors responsible for this story: Paul Jackson at email@example.com, Jason Clenfield
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