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`Unemployment Time Bomb` Feared to Explode in July

Posted April. 16, 2009 09:12,   


The number of jobs declined nearly 200,000 last month year-on-year, while the number of jobless increased to 952,000, the worst in 10 years.

Since the number of temporary jobs with low security is declining fast, fears are mounting over a potential "unemployment time bomb" in July, when the Irregular Worker Act will take effect.

According to an employment report for March released by the National Statistical Office yesterday, the number of employed was 23.1 million people, down 195,000 (0.8 percent) from March last year (23.3 million). The year-on-year decline was the sharpest since a drop of 390,000 in March 1999, when the country was recovering from the Asian financial crisis.

The monthly number of employed had continued to increase until November last year, but started to decline in December. It has fallen for four straight months since due to the global economic crisis.

The number of jobless last month was 952,000, up 28,000 from February, with the jobless rate rising to four percent. The number of jobless has been hovering below one million since April 2001, when the figure was 926,000.

Experts warn, however, that if this pace continues, the figure will top one million soon. Given the growing difficulty in landing a job, the number of people who have given up looking for work last month shot up 70.5 percent to 171,000 from the same month a year ago.

By the number of working hours, those who worked 36 hours or less per week numbered 2.9 million, up 11.8 percent, while those working 36 hours or more fell to 19.9 million, down 2.6 percent. This indicates that the quality of jobs is deteriorating as only part-time jobs are increasing in number.

In addition, the number of regular workers continued its growth trend by rising 276,000 last month, but other types of workers saw their numbers drop. The number of self-employed fell 222,000, that of short-term workers dropped 83,000, and that of daily workers declined 112,000.

Jeong In-sook, head of the employment statistics team at the National Statistical Office, said, “Considering nearly half of short-term and daily workers are temporary workers, the number of temporary workers seem to have declined significantly.”

Labor experts said the Non-regular Worker Act, which prevents employers from employing the same temporary workers for more than two years, has significantly affected the recent fall in the number of such jobs. The act is intended to encourage promotion of temps to permanent staff, but has effectively reduced employment overall.

An official at a state-run think tank said, “Temporary workers account for 192 of our institute`s 404 staff members, and nearly half of temporary workers will see their two-year limit expire by year`s end. They will then be forced to leave the institute.”

Since one million temporary workers will see their two-year limit expire in July, the government submitted a revision bill to the act extending the period from two to four years.

The ruling Grand National Party is moving to postpone the effectuation of this bill to four years from now, but opposition parties and the labor community oppose, saying it will generate a massive number of temporary workers. This debate could also herald another showdown in parliament.

leon@donga.com peacechaos@donga.com