Korea’s economically inactive population rises to record high in July

Hit hardest by the fallout of the coronavirus pandemic, South Korea’s jobless rate rose to the highest level in two decades, while many people were forced to quit jobs amid strained business activities.

The country’s economically inactive population, or people who are capable of working but choose not to seek jobs, rose by 502,000 year-on-year to a record 16.55 million in July, according to data compiled by Statistics Korea on Wednesday.

That marks the highest level since the statistical office began compiling such data in 1999. Those categorized as “resting” also surged to a record high of 2.31 million, with the number rising in all age groups.

The economically active population totaled 28.2 million, down 236,000 on the year, extending its slide for the fifth straight month, data showed.

Government data released on Monday showed that as more people were losing jobs, the country’s jobless claims payments topped 1 trillion won ($842 million) for the third consecutive month in July, threatening to widen the shortfalls of the state employment insurance funds to as much as 3.3 trillion won by year’s end.



JOBLESS RATE HIGHEST IN 2 DECADES

The country's headline jobless rate rose by 0.1 percentage point on year to 4%, posting the highest rate of any July since 2000. The number of employed people fell for a fifth straight month to 27.1 million last month – the longest period of decline since jobs disappeared for eight straight months in 2009 from January during the global financial crisis.

"It is painful that the job figures for young adults particularly remain weak, and that industries involving face-to-face interaction, such as restaurants and the accommodation sector, are still facing troubles," said Finance Minister Hong Nam-ki.

The unemployment rate for young adults -- those aged between 15 and 29 -- reached 9.7% in July.

The coronavirus outbreak has also hit temporary employees hard, with the number of those workers plunging by 395,000 in July. Jobs for day laborers shed 44,000 over the period.

By industry, the accommodation and food-services segment saw a decrease of 225,000 jobs last month, and the wholesale and retail sector lost 127,000 jobs.

"People refrained from having gatherings or going outside due to the virus pandemic, along with the sharp tumble in the number of inbound tourists," said Chung Dong-myung, a senior official at Statistics Korea.

Korea’s job market outlook for August also looks grim due to the heavy rainfall that has pummeled the country for more than 50 days this summer, the longest on record. As of Wednesday, the rain has left 33 dead, nine others missing, and displaced more than 7,600 people from their homes.

Write to Jin-gyu Kang at josep@hankyung.com