The amount of South Korea’s exports last month stood at 50.731 billion dollars, an increase of 45.6 percent year-on-year. According to the Korea Customs Service, it is the largest increase in 32 years and nine months since 1988, the year that recorded a 52.6 percent increase. The Organization for Economic Cooperation and Development updated on Monday Korea’s economic growth rate for this year to 3.8 percent, a 0.5 percent increase, in two months. However, only simple part-time jobs are increasing in the employment market, while jobs for those in their 30s and 40s, the pillar of the economy, are decreasing. There are heightened concerns on the structure of the employment market where the core working class is isolated.
The nation’s exports increased for seven months in a row, and this is the first time that the amount of exports increased by more than 40 percent for two consecutive months. Major products such as semiconductors and automobiles are showing performances that go beyond the base effect. Normally, such an increase is reflected to the employment index. But the reality is the opposite. Quality jobs decreased and prime-age workers are having more difficulties. According to the CEO Score, a business assessment company, the number of regular jobs in 309 conglomerates in the first quarter decreased by 11,710. Recruitment increased slightly in April, but jobs for those in their 30s and 40s decreased, and the youth unemployment is persisting.
Meanwhile, businesses that should create jobs are going abroad. According to the National Assembly Budget Office, the number of corporates founded overseas over the past seven years exceeded 22,000, but only 84 reshored. Major companies in Korea announced during the Korea-U.S. summit to invest 44 trillion won in the U.S. It is a decision based on global strategies, but it also means domestic investment and recruitment will shrink.
The government has been trying to invite Korean businesses operating overseas back to Korea through the so-called “U-turn law” since 2014. However, its support has been limited to providing subsidies or convenience in renting government-owned land. This is not enough to bring businesses back considering the high corporate taxes and regulations on labor and environment. According to the Federation of Korean Industries, only three percent out of top 1,000 companies in sales operating overseas are interested in reshoring.
“The Medium/Long Term Financial Management Operation Report” published by the Board of Audit and Inspection on Monday says the deficit amount of employment insurance of the next five years will be as much as 19 trillion won. This means unemployment benefits have risen to a point where the government cannot afford it any longer. But the government shows no interest in creating jobs through taxes and conditions for employment. This topic is rarely discussed among politicians who are preparing for the presidential election next year. If the government spends half of the amount that it spent on throwing around cash, the employment issue would look a lot better than now.