State unemployment subsidy up 29% on year to hit record high in Korea in ‘18

2019.01.07 13:21:51 | 2019.01.07 13:46:15

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State subsidies for those who had lost jobs hit record 6.5 trillion won ($5.8 billion) last year, underscoring Korea’s job crisis.

According to data released by the Ministry of Employment and Labor on Monday, the Korean government paid out 6.5 trillion won to support jobless Koreans last year. The figure is the highest-ever record and a 28.5 percent jump from the previous year. In December alone, unemployment coverage amounted 475.3 billion won, up 34.1 percent from a year ago period.

The Korean government gives out benefits to workers who had been dismissed according to their unemployment insurance coverage period and rate to help cover minimum living expenses while searching for a new job.

In December, a total of 376,000 people filed for the unemployment compensation, up 14.8 percent from the same month a year earlier.

The surge in allowances coincided with the country’s dismal job market last year that was at its worst since the 1997-1998 Asian financial crisis. The country lost 909,000 jobs in November, crossing the 900,000-mark for the first time since 1999.

Manufacturing sectors such as automotive, construction and shipbuilding streamlined due to slow business, the ministry said.

The drastic hike in minimum wage also played a part in the surge in state payouts for the jobless last year as the minimum compensation is set at 90 percent of the daily minimum wage. At the beginning of 2018, the country’s minimum wage jumped 16.4 percent.

The quality of employment, however, has improved over the cited period. The number of people covered by employment insurance rose 3.6 percent to 13.4 million in December from the same month a year ago. The on-year growth is the largest since October 2012.

The improvement came largely from the service sector. The number of employment insurance-covered people in the service sector stood at 8.99 million, up by 455,000 from a year ago period. But that of manufacturing segment contracted by 2,000, marking the first fall in eight months amid ongoing restructuring.

By Choi Hee-seok and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper &, All rights reserved]