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(4th LD) Jobless rate falls to 4.1 pct in April, job creation remains sluggish

All Headlines 14:16 May 16, 2018

(ATTN: ADDS more details in last 4 paras; CHANGES photo)

SEJONG, May 16 (Yonhap) -- South Korea's jobless rate fell slightly in April due to a rise in employment in the health care, financial service and public service sectors, but job creation still remained weak, government data showed Wednesday.

The unemployment rate stood at 4.1 percent last month, down 0.1 percentage point from a year earlier, according to the report compiled by Statistics Korea.

The number of employed people reached 26.86 million in April, up 123,000 from a year earlier, according to the data.

The unemployment rate for young adults -- those aged between 15 and 29 -- was 10.7 percent, down 0.5 percentage point from a year earlier.

The employment rate stood at 66.6 percent in April, unchanged from a year earlier, with the corresponding figure for young people at 42 percent, down 0.1 percentage point over the cited period.

The number of newly added jobs marks the third straight month that the figure has stayed slightly above the 100,000 mark. The comparable figures for February and March were 104,000 and 112,000, the data showed.

"The number of newly added jobs in the manufacturing sector declined, and there were some 420,000 jobs created in April of last year, which affected this year's number," an official at the agency said.

The number of workers employed in the manufacturing segment declined 68,000 in April, with that for the retail sector shedding 61,000.

"Job cuts in shipping and other segments affected by restructuring have contributed to the decline, and overall business conditions have not been good in the past two or three months," the official said.

In March, the government proposed a 3.9 trillion-won (US$3.69 billion) extra budget largely to create new jobs for young people, amid deepening concerns about high unemployment, which the government warned would have catastrophic consequences.

The government hopes that with the pledged support, the nation's youth unemployment could fall below 8 percent by 2021 and upwards of 220,000 jobs could be newly added through 2021.

Seoul's push comes as President Moon Jae-in has called for all-out efforts to create new quality jobs for young people and warned that the high jobless numbers among young adults is a national disaster.

The proposed extra budget is the second of its kind under the incumbent administration. Last year, the government got parliament to approve an 11 trillion-won supplementary budget that focused on creating more quality jobs.

Experts say the government's job creation efforts may miss this year's target of 320,000. Earlier, the Bank of Korea lowered its estimate for job creation to 260,000 from its earlier projection of 300,000.

"In addition to the minimum wage hike, a slump in the manufacturing sector contributed to less than expected job creation in April," Ju Won, an economist at Hyundai Research Institute, said. "The current slump in the pace of job creation may continue down the road given various conditions."

The economist said new jobs may even dip below 200,000 this year.

Under the catchphrase of an income-led economic expansion and a reduction of the pay gap between workers, the Moon Jae-in government increased the minimum wage for all workers by 16.4 percent this year to 7,530 won from 6,470 in 2017.

The government is determined to further raise the minimum wage in Asia's fourth-largest economy to at least 10,000 won by 2020 in the belief that it is time to break the economy away from an export-dependent growth path.

Meanwhile, Finance Minister Kim Dong-yeon told lawmakers earlier in the day that the legal minimum wage hike might have affected the job market, a shift from his earlier remarks denying its impact on the country's unemployment level.

Last month, the country's chief economic policymaker said that it was too early to gauge the impact of the wage increase.

With labor-intensive sectors, such as delivery services, restaurant chains and small-time retailers, being hit the hardest, concerns are growing over the rise's impact.

The move has also taken flak for the recent rise in prices of coffee and doughnuts. Some fast-food chain operators have already marked up prices, partly blaming the minimum wage hike and warning of further adjustments to accommodate the increase.

Finance Minister Kim Dong-yeon answers lawmakers' questions in parliament on May 16, 2018. (Yonhap)


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