Job market outlook gloomy for 2010
LEESUN
overshadowing the much anticipated rapid pace of the Korean economy,
experts say. Asia's fourth-largest economy has been a subject of envy
for its rapid recovery in the unprecedented global economic crisis,
but it is suffering from jobless growth, posing challenges on the
government to create effective measures to solve the fundamental
problems and create a stable job market.
"The country is suffering from jobless growth, and until companies
feel confident about an economic recovery, most of them are going to
be reluctant to hire more people," Lee Bu-kyoung, an economist at the
Hyundai Research Institute, told The Korea Herald. "Jobs will only be
created if companies are willing to invest."
The Lee Myung-bak administration has garnered some positive
assessments for proposing various job-creation measures, although
temporary and artificial mechanisms, like job-sharing and internship
programs to contain sharp declines in unemployment and prevent social
unrest.
"The job market looks bleak this year, despite expectations that the
government will continue implementing economic stimulus measures to
ensure a smooth and stable recovery," Lee Dong-hun, an economist at
Samsung Economic Research Institute, said in a telephone interview.
He also stressed that companies are just not ready to expand their
employment payroll.
Systemic problem
Experts say the nation's unemployment problems are systemic and
require an indefinite amount of time to undergo a full recovery.
"Korea's unemployment problem can be blamed on the basic foundations
of the labor market," said Sohn Min-jung, a labor market expert at the
Samsung Economic Research Institute. "The government's temporary job-
stimulus measures can be commended for easing the severity of job
losses in the economic crisis, but it can't avoid the challenge of
having to find countermeasures for the country's jobless economic
growth."
A recent survey of the heads of Korea's major private and state-run
economic think tanks, conducted by the Federation of Korean
Industries, placed "job creation" at the top of the government's
policy priority list for 2010.
"The survey results underscore that economic experts believe there is
a need to revive job creation amid growing anticipation of an economic
recovery," the FKI said in a statement.
Sluggish job creation in the services sector has failed to act as a
cushion for the manufacturing industry's chronic unemployment
conditions, experts say.
"Jobs need to be created in the services sector, but this isn't the
case either, so our labor market is stuck in the vicious cycle of
jobless growth," Lee Geun-tae, an economist at the LG Economic
Research Institute, explained in a telephone interview.
He noted that the protracting sluggish domestic consumption, whose
onset can be tracked to 2000, has been a factor in curbing job
growth.
President Lee Myung-bak recently entreated for continued efforts by
the government and companies to create jobs, citing the unlikelihood
that employment conditions will improve within the next two years.
"The economy is improving, but the employment problem is still in
serious condition," Lee had said.
The nation's jobless rate rose in November, despite signs the economy
is making a faster-than-expected recovery. The unemployment figure
stood at 3.3 percent last month, up from 3.2 percent the previous
month, according to the report by the Statistics Korea. The figure
marks the first rise after it fell to an 11-month low in October.
The number of employed people totaled 23.8 million last month, down
10,000 from a year earlier. The on-year job contraction comes after
three straight months of increases, the report showed.
Underscoring the strained labor conditions here, Korea's employment
rate stood below the average for countries in the Organization for
Economic Cooperation and Development last year, a report released Dec.
21 showed. The rate, which measures the percentage of employed people
aged between 15 and 64 to the entire working-age population, came to
63.8 percent in 2008, compared with the OECD average of 66.5 percent,
according to the report by the Statistics Korea.
Worst conditions for youths
The report showed that employment conditions were the worst for
younger people. The employment rate for people aged between 15 and 29
stood at 41.3 percent compared with Canada and the United States,
where the rate stood at 59.6 percent and 51.2 percent, respectively,
according to the report.
The government may have announced plans to continue with its public
work programs to create 650,000 new jobs until the first half of this
year, but it appears easier to be said than done.
Park Chae-khun, manager of the Labor-Management Division at the Korea
Chamber of Commerce and Industry, said that companies need to be
confident that the economy is in full recovery in order to consider
hiring new people.
"Most companies say they need to be confident about a full-fledged
economic recovery if they want to raise investments and create jobs,
so that's why we're seeing some companies grow while their personnel
pool has shrunk," Park said in a telephone interview.
"An improvement in the labor market looks tough for even next year;
and the question that remains is how jobs will be created," the
executive stressed.
He, however, underscored the job-growth potential for the services
sector, such as in the areas of social welfare, health, childcare and
education.
"These areas have the potential to create new jobs, since it is
typical for them to develop and strengthen in tandem with an advancing
economy," Park said. But he noted that funding is the issue for these
areas.
Lee Bu-kyoung of Hyundai Research Institute noted that recovery of
Korea's export-oriented manufacturers could offer hope.
"If the export-based companies feel confident in a recovery and start
to invest, this could trickle down to the domestic-economy-oriented
companies, which would be helped by a boost in consumer spending and
overall improvement in the economic conditions," he said.
Source: The Korea Herald/2010.1.1./By Yoo Soh-jung
(soh...@heraldm.com)