Youth, Overall Joblessness Gap Widens in South Korea

The rate gap between youth unemployment and overall unemployment widened by more than 6 percentage points last year, Statistics Korea said Wednesday. This is the largest since the state statistics agency started collecting data on joblessness in 2000.

Last year, the overall jobless rate stood at 3.6%, while the youth unemployment rate reached 9.8%. The gap between the two had been steady at around 4 percentage points from 2003 to 2012. But it began to widen in 2013 when it widened to 5 percentage points, Yonhap reported.

In 2015, it further expanded to 5.6 percentage points as the youth unemployment rate increased to 9.2% from 2013’s 8%.

“The job market for the young remained weak as conglomerates reduced their active hiring of entry-level workers. Also, the number of those aged over 50 seeking jobs increased,” Statistics Korea said.

Also, the ongoing corporate restructuring of the shipbuilding and shipping industries took a toll on manufacturing jobs.

The presidential scandal involving ex-president Park Geun-hye’s associate Choi Soon-sil weakened business sentiment late last year.

Korea’s youth unemployment rate grew to 11.8% last March, about 2.7 times the overall unemployment rate in the same period. Youth joblessness here is higher than in the United States and Japan. The US youth unemployment rate reached 10.4%, while that of Japan stood at 6.9% last March.

Only 280,000 are expected to be newly employed this year, down from 300,000 last year, according to the Bank of Korea’s recent forecast revision.

Analysts say the next government needs to break the current vicious cycle in which companies and consumers are reluctant to invest and spend due to low growth. This, in turn, is leading to reduced job creation and wage growth.