Job Creation to Remain Around 220,000: KDI

An estimated 220,000 jobs will be created this year, if the employment rates among the age groups remain the same as last year, a leading economic thick tank predicted yesterday. This figure falls far short of the Lee Myung-bak administration’s ambitious aim to create 350,000 jobs this year.

On the report analyzing the current slowing pace of employment increase, the Korea Development Institute (KDI) expected the nation’s job creation will fall over the next five years, from 222,000 this year to 152,000 in 2012, when employment rates by age group are applied to the population calculation.

The institute forecasted the number of employed people to grow by only 222,000 this year. It is predicted that job creation will fall to 203,000 in 2009, 186,000 in 2010, 175,000 in 2011 and to 152,000 in 2012.

The economic research institute analyzed that with the aging population in society, the economically active population declines while those in non-economically active groups increase, translating into the reduction of the entire employment rates. The KDI predicted that the age group of 25-49 is expected to go down after reaching its culmination in 2007, while those in 25-54 is predicted to decrease starting 2009.

The think tank pointed out that the aging population, along with slack domestic consumption, lies in the reason behind the recent slowdown of the number of employed to the 200,000 level.

Based on its estimates on the influence of total demand such as consumption, investment and net exports, on job creation between 1990 and 2007, the KDI drew a conclusion that the increase in real consumption resulted in better job creation than the growth in real investment. In other words, consumption, instead of investment, boosted creating jobs.

tesomiom@donga.com