Jobless rate to rise to 7.8 percent

If the nation fails to properly carry out corporate restructuring due to labor disputes, the number of jobless people will reach 1.7 million and the unemployment rate will climb to 7.8 percent this year, a report forecast Wednesday.

According to the report on labor market prospects in 2001, compiled by Prof. Kim Jae-Won of Hanyang University at the request of the Korean Chamber of Commerce and Industry, the success of the Korean economy this year will depend on whether the nation succeeds in restructuring by stabilizing labor-management relations.

¡°Unless economic uncertainties stemming from prolonged restructuring are removed, the nation could see a level of unemployment approaching that of 1999, when the effect of the 1997 economic crisis were still being strongly felt. But if the nation succeeds in restructuring, the number of jobless people will remain at 840,000 and the jobless rate at 3.8 percent,¡± the report emphasized.

The report said that labor prospects for this year were dampened by declines in the prices of major Korean export items, the U.S. economic slowdown and the slump in the domestic economy.

¡°What is particularly worrisome is that the number of jobless people could sharply increase if the economic slump persists and restructuring is further delayed by labor disputes,¡± it said.

Regarding the argument by labor circles that workers were forced to bear the brunt of the economic crisis, the report noted that the increase rate of nominal wages since 1996 stood at 7.5 percent, well over the 6.2 percent growth rate in nominal productivity during the period. It said that except for 1998, the wage increase rate has exceeded the growth rate of labor productivity each year.