SEJONG, 14 May 2020 – South Korea aims to create 1.56 million jobs in the public sector, Finance Minister Hong Nam-ki said today, as the nation’s economy suffered its sharpest job losses in 21 years over the COVID-19 pandemic.
Hong said the government will soon draw up plans to mitigate the impact of the virus on the job market, Yonhap News Agency reported.
About one million jobs in the public sector have not been opened due to social distancing rules, but the government will soon open such jobs by easing some rules, Hong said.
The government will also encourage public firms to create some 550,000 jobs for young people, Hong said.
Yesterday, South Korea reported the sharpest drop in its April employment since 1999 as the pandemic hammered job markets.
The number of employed people in South Korea stood at 26.56 million in April, 476,000 people fewer than a year ago, marking the biggest year-on-year (y-o-y) decline since February 1999.
The labour force participation rate, which refers to the percentage of those who are aged 15 or older and remain in the labour force by either being employed or actively looking for jobs, also fell 1.6 percentage points (ppts) to 62% in April, according to the data compiled by Statistics Korea.
It also marked the sharpest decline since 2000, when the nation’s job markets were crippled in the wake of the Asian financial crisis.
With companies slashing hiring and the virus cutting social activities, economists said the worst had yet to come, heightening the urgency of the government’s efforts to project jobs.
Hong said job losses in the service sector showed signs of spreading to the manufacturing sector in April, though temporary workers were the hardest hit.
The government will also push for a safety net for temporary and freelance workers, Hong said.
South Korea has promised relief packages worth some 240 trillion won (US$197.2 billion or RM847.26 billion) to ease the economic fallout from the virus.
The nation’s economy shrank 1.4% quarter-on-quarter in the first quarter of the year, marking the sharpest quarterly contraction since the last three months of 2008.
Vice Finance Minister Kim Yong-beom told a briefing that the nation’s economy faces a “wartime situation” and the government will make utmost efforts to create jobs.
South Korea’s exports sank 46.3% y-o-y in the first 10 days of May, as the pandemic dampened global demand for Korean goods. Daily average exports during the 10-day period slipped 30.2% y-o-y.
Kim said exports are likely to contract for the time being but may recover as the US and European nations have slowly eased lockdown measures.
However, fears of a new wave of infections and US-China friction are expected to weigh on the nation’s economy, Kim said.