Go to contents

Hardship Lingers for Jobless After Benefits Expire

Posted October. 07, 2009 07:28,   


An office worker who lost his job in spring last year opened a restaurant in July this year in Seoul’s Geumcheon district.

He earns around a million won (854 U.S. dollars) per month from the restaurant but this is less than the 1.3 million won (1,111 dollars) in monthly unemployment benefits he received from July to December last year.

Another person who found work in April this year also earns about a million won per month, less than the 1.2 million won (1,025 dollars) he received in unemployment benefits.

According to a report submitted to ruling Grand National Party lawmaker Park Jun-seon by the Labor Ministry yesterday, 43.6 percent of those whose unemployment benefits expired have plunged into poverty. More than half (53.4 percent) have remained jobless six months after such benefits ran out.

The ministry surveyed 1,001 people whose unemployment benefits period expired between October and December last year. The survey was the first of its kind by the ministry.

○ Declining income

Among those no longer eligible for jobless benefits, 417, or 41.7 percent, were reemployed. Among them, 194, or 46.5 percent, said their wages are less than what they previously used to earn, 38.4 percent (160) received the same amount of wages as before, and 15.1 percent (63) said they earned more.

Those who opened their own businesses gave similar answers. Ten, or 20 percent, saw their incomes rise while 21, or 42 percent, earned less than before.

The remaining 36 percent (18) cited no difference in income levels.

A ministry official said, “Those who lost their jobs saw their incomes decline when they got unemployment benefits and a further drop after the unemployment benefit period expired.”

○ Hardships continue

When they received unemployment benefits, such aid comprised an average 58.9 percent of living expenses. About one in four (24.4 percent or 244 people) said the benefits were their sole source of income.

Forty-nine percent got extra money from relatives, 20.7 percent used existing assets such as savings, and 9.6 percent resorted to loans.

They were no better off after they stopped getting unemployment benefits. Of 658 people whose source of income changed, only 228, or 34.7 percent, said they earned money through their labor.

Thirty-two percent (215) relied on income earned by family members, 8.1 percent (53) depended on existing assets such as savings, 7.4 percent (49) loans, and 2.7 percent (18) retirement benefits.

Lawmaker Park said, “The problem is that the middle class has become the working class and the working class has become the poor,” adding, “Measures to help the unemployed are important, but helping those who are thrown out of the social safety net due to the expiration of unemployment benefits is also important.”