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[Editorial] Don`t Be too Optimistic with Unemployment Data

[Editorial] Don`t Be too Optimistic with Unemployment Data

Posted December. 25, 2001 14:16,   


The perspective of the government about the current serious unemployment situation is dismal. The government released a plan for the economic operation of next year, expecting 3.5 percent of unemployment rate, which is lower than the rate of this year. It seems that the government does not acknowledge the reality of the unemployment situation and the struggles in the job market and it brings up a suspicion that the government deludes the people with the games of deceptive numbers. Some optimistic economic prospects of economic institutes based on the signs of recent economic recovery might bring about policy mistakes by underestimating the seriousness of the unemployment problem.

The government estimates 3.7 percent of unemployment which is lower than the originally estimated 4 percent, even though the Korean economy has gone through the slowdown of the world economy and the plunge of the semi-conductor prices in the international market. The unemployment rate is exceptionally low considering the economic recession including the reduction of production and the decrease of export for 8 consecutive months.

However, the government may recognize that the decrease of the unemployment rate is not based on the increased jobs and the decrease of the jobless people. If the government statistics are correct, how could we explain the current situation of the colleges that are struggling to find jobs for the graduates? The serious competition in the job market of the college graduates is already far beyond the critical situation. Considering that many college students are taking the leave of absence, for example, 30-40 percent in Seoul area colleges and up to 50 percent in local colleges, the unemployment data that the unemployment rate is decreasing is far from the reality.

The optional illusion is so serious recently that the government have chosen to see only the decrease of unemployment rate while the economic recession is getting worse. The unemployment rate decreases when many people give up looking for jobs and rather serve the Military service or stay at school for further study. In addition, if you work only one hour a week, you will not be classified as an unemployed person by the current statistic standard.

It is uncertain whether the economy will recover next year. Some optimistic prospects are based on the recovery of stock price and the revitalized real estate market. However, it seems too early to expect an economic recovery based on such a financial market trend. Furthermore, most optimistic prospects were issued before the weak yen and the Argentine economic crisis.

The government should recognize the seriousness of the unemployment situation and must try to establish multiple countermeasures to resolve the unemployment after clearly understanding the situation. In addition, the government must adjust the unemployment statistical method, which does not reflect the reality of the unemployment situation.