Unemployment benefits (job-seeking benefits) received when people lose their jobs involuntarily have come to nearly 60 trillion won over the past five years. This year, the job market is expected to worsen, with fewer job openings than job seekers compared with last year, pushing up job-seeking benefit payouts. Observers say measures are needed to stabilize the finances of the Employment Insurance Fund, which funds job-seeking benefits.
According to data titled "Status of unemployment benefit payments over the past five years," submitted by the Ministry of Employment and Labor to the office of People Power Party lawmaker Kim So-hee, a member of the National Assembly's Environment and Labor Committee, on 26th, job-seeking benefit payouts totaled 57.876 trillion won from 2020 to 2024. As of July this year, 7.58 trillion won had already been paid, bringing the total to 65.456 trillion won over the past five years when combined.
By year, job-seeking benefit payouts were ▲11.856 trillion won in 2020 ▲12.062 trillion won in 2021 ▲10.911 trillion won in 2022 ▲11.307 trillion won in 2023 ▲11.74 trillion won in 2024. Job-seeking benefit payouts hit a record during the Moon Jae-in administration amid the COVID-19 pandemic. After stabilizing early in the Yoon Suk-yeol administration, they have been rising again.
By industry, manufacturing and construction had the most recipients. They appear to have taken a direct hit from weak exports and an economic slump. As of last year, 260,000 people in manufacturing and 214,000 in construction received job-seeking benefits. They were followed by ▲health and social welfare services with 203,000 ▲wholesale and retail with 186,000 ▲business support and rental services with 168,000 ▲lodging and food service with 118,000.
This year's job-seeking benefit payouts are likely to approach the 12 trillion won level recorded at the end of the Moon administration. As of July, 7.58 trillion won had already been paid, and with five months of data left to tally, the total will likely exceed last year's level. In particular, the average job openings-to-applicants ratio, calculated by dividing new job seekers by new job openings, fell from 0.498 last year to 0.370 (as of July). This means the trend of fewer openings than seekers has intensified.
There are also concerns about the fiscal soundness of the Employment Insurance Fund, which finances job-seeking benefits. As the minimum wage has risen sharply in recent years, the lower limit of unemployment benefits—set at 80% of the minimum wage—has increased. According to the Korea Enterprises Federation, the current monthly job-seeking benefit for the unemployed is about 1.93 million won. On top of that, the Ministry of Employment and Labor is pushing a plan to pay unemployment benefits to voluntary leavers as well. There continues to be a steady stream of fraudulent and repeat recipients.
While the labor ministry said the Employment Insurance Fund, which finances job-seeking benefits, can remain in surplus through 2065, it acknowledged that stabilization measures, including preventing moral hazard, are needed. As fiscal stabilization steps for the Employment Insurance Fund, it cited preventing repeat claims and introducing an experience rating system. Preventing repeat claims would limit payments by cutting benefits for repeat recipients or extending the waiting period. The experience rating system would impose additional employment insurance premiums on employers based on metrics such as job-seeking benefit payouts.
People Power Party lawmaker Kim So-hee said, "It is a warning sign that job-seeking benefit payouts have neared 60 trillion won in five years," adding, "We will curb repeat claims and ensure job-seeking benefits lead to reemployment."