[Editorial] Spring Has Yet to Come for Jobs

Despite some signs of economic recovery, the number of unemployed and those giving up looking for jobs are increasing. Boosting job creation, the top priority of the economic policy, has yet to materialize. Last month’s official unemployment rate stood at four percent, the highest since March 2001. In particular, the youth unemployment rate of those in their 20s rose further to 8.7 percent. The number of people who gave up job searching altogether was 135,000, a 29 percent rise month-on-month.

The government says the unemployment rate will fall in the second half of this year since the economy is recovering, but a slight drop in the unemployment rate does not solve the job problem situation. The Korea Development Institute (KDI) estimated employment to be falling continuously after the financial crisis, saying that a majority of people 15 years and older were classified as idle labor force not factored into the unemployment rate as they had abandoned their job search. Korea’s employment rate, the rate of those landing jobs, for the age bracket of 15 to 64 years old was 62 percent last month, which is 6-10 percent lower than that of the U.S. and Britain. Hence, the worsened income distribution and increase in abject poverty rate.

Temporarily lowering the unemployment rate as a short-term measure such as provision of jobs in the public sector cannot be a fundamental solution. Eventually, the private sector must create jobs. The government has unveiled a measure to enhance the competitiveness of the service industry to drive up the employment rate, but it should be the manufacturing industry that creates more jobs substantially.

Vice Chairman of the Federation of Korean Industries (FKI) Sohn Byung-doo said, “Easing the regulation on companies will boost the corporate investment sentiment.” The gist of job creation is precisely what he said. Nevertheless, Kang Chul-kyu, chairman of the Fair Trade Commission (FTC), contends, “The FTC’s current policies on corporations must be maintained until the market becomes more transparent.” It is time to recover the investment sentiment in the corporate sector and not to enhance the market transparency. Moreover, the flexibility of the labor market must be furthered to embrace more youth jobseekers.