Job market losing steam amid COVID resurgence

The pace of the country’s job growth slowed for the second straight month in July amid the resurgence of COVID-19 and such a trend is likely to continue throughout the remainder of the year due to increasing economic downside risks, Statistics Korea announced on Wednesday.

The gloomy outlook overshadows the record employment rate of 62.9 percent for any July set last month, fueling concerns that the government should work faster on its plan to boost the job market, which is driven by the private sector, with economic risk factors, both domestic and overseas, looming.

The total number of employed people aged 15 or older stood at 28.47 million in July, up 826,000 from a year earlier to mark the 17 consecutive monthly increase.

The employment rate last month accordingly climbed 1.6 percentage points year-on-year to 62.9 percent, which is the highest for any July since 1982 when the statistics office started compiling relevant data.

However, the July figure of 826,000 newly added jobs was down from 841,000 in June and 935,000 in May.

Such a downward trend for two consecutive months is partly attributable to the base effect from last year when the COVID-19 pandemic affected the labor market, a senior Statistics Korea official said during a press briefing.

The official went on to say that the slowdown in job growth is not short-lived, but is anticipated to last throughout the second half and even in 2023 because of a range of factors that add to economic uncertainties.

The listed factors were the benchmark interest rate, the resurgence of the COVID-19 pandemic as well as consumer and business sentiment that has turned negative amid soaring inflation and the growth slowdown.

Job creation for young people is also posing a challenge for the government, which is faced with addressing population decline.

For instance, the number of newly-hired people aged between 15 and 29 increased by 92,000 between June and July, compared to 479,000 for those aged 60 or older and 194,000 for those in their 50s.

The Ministry of Economy and Finance said it is working closely with relevant ministries to “thoroughly monitor the job market.”

It noted the government on Monday unveiled a set of measures aimed at maximizing employment by the private sector by easing regulations, offering tax incentives and supporting emerging industries.

The Korea Economic Research Institute, a business lobby group-affiliated think tank, assessed that the government “should speed up efforts in terms of job market policy although it is on the right track.”