Last month, the youth unemployment rate and employment rate for those aged 15 to 29 deteriorated significantly, the largest decline in nearly four years. This is interpreted as reflecting the prolonged economic downturn, which has started to show its impacts on employment, a lagging indicator.
According to the Korean Statistical Information Service (KOSIS) on the 16th, the youth employment supplemental indicator 3 (perceived unemployment rate) recorded a rise of 0.8 percentage points from a year ago, reaching 16.4% last month.
The year-on-year increase in the youth employment supplemental indicator 3 last month was the largest in 3 years and 11 months since February 2021 (26.8%) at 3.7 percentage points.
The employment supplemental indicator 3 encompasses the actual job demand that is not being filled in the labor market. It is calculated as the ratio of 'time-related additional job seekers + unemployed individuals + potential labor force' to the 'potential labor force.' The potential labor force includes the economically active population as well as those who are potential job seekers (those who have sought work but are unable to work due to certain circumstances) and those who are potential job seekers (those who are able to work but have not sought employment for the past four weeks).
Employment supplemental indicator 3 is also referred to as the 'perceived unemployment rate' because it reflects the employment situation felt by individuals. Since the Korean Statistical Information Service classifies 'unemployed individuals' as those who ▲have not worked in the past week, ▲are available to work if a job is offered, and ▲have actively sought employment in the past four weeks, the employment supplemental indicator 3 is perceived to be closer to the general public’s awareness.
The employment supplemental indicator 3 showed a downward trend after peaking at 27.2% in January 2021. Compared to the previous year, it declined for 45 months starting from March 2021. However, it recorded a year-on-year increase of 0.5 percentage points to 16.0% last December, and the increase grew larger last month.
The youth unemployment rate remained the same at 6.0% compared to a year ago, and the number of unemployed individuals decreased by 16,000 to 230,000, yet this suggests that the perceived difficulties suddenly increased.
The significant deterioration of the youth perceived unemployment rate is interpreted as a result of a substantial increase in youth who are in 'incomplete employment status.'
Last month, the number of 'time-related additional job seekers,' who are working but desire to work more, was 131,000, an increase of 41,000 from a year ago. This too marks the largest increase in 3 years and 11 months since February 2021 (46,000).
Time-related additional job seekers are those who work less than 36 hours a week but are willing and able to take on additional employment.
These are individuals who answered in an economic activity survey that they want to increase the hours of their current job, want to work in addition to their current job, or wish to change to a job that allows for more working hours.
Although they are recorded as employed, it means that youth are taking on temporary or short-term jobs to make a living due to the limited availability of stable jobs such as regular employment or due to prolonged job search periods.
On the other hand, last month, the youth employment rate recorded a fall of 1.5 percentage points to 44.8% due to a significant drop in the number of employed individuals (-218,000). This is the largest decline in four years since January 2021 (-2.9 percentage points), primarily due to increased uncertainty in the economy and a higher proportion of experienced hires.
Due to the job market conditions, the number of youth who are neither working nor actively seeking jobs, reported as 'inactive,' has steadily increased for nine consecutive months compared to the same month the previous year, reaching 434,000.
In the 'Recent Economic Trends (Green Book),' which reflects the government’s perception of the economic situation, the Ministry of Strategy and Finance used the expression 'signs of recovery in domestic demand' from May last year but removed it in November. In the report released on the 14th, the expression 'delay in recovery of domestic demand' appeared for the first time.
To break the trend of persistent deterioration in youth employment that shows signs of starting in earnest, the government plans to provide 'priming water' in the public sector, considered as quality jobs.
Choi Sang-mok, acting Prime Minister and Minister of Strategy and Finance, said at the people's livelihood economy inspection meeting on the 14th, 'We will expand the new hires in public institutions from 20,000 last year to 24,000 this year and increase the proportion of long internships preferred by youth, and we will set up a hotline to resolve corporate hiring difficulties to actively support private sector job creation.'