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(Yonhap Feature) Middle-aged jobseekers feel pinch of bleak job market

All Headlines 09:00 August 31, 2018

By Kim Deok-hyun

SEOUL, Aug. 31 (Yonhap) -- It's been about nine months since Kang Dong-jin closed his small coffee shop in Seoul due to cutthroat competition and rising rent, and turned all his attention to finding new employment.

The 40-something former office worker was moderately optimistic that he could land a post. But now, however, he has found out firsthand how hard it is to get hired, with new employment numbers falling to the lowest level in nearly nine years.

"I applied to tens of companies last month, only to get no callbacks," Kang said. "It is a really disheartening experience."

Statistics show Kang is not alone. The number of employed workers aged between 40 and 49 stood at 6.67 million last month, down about 147,000 from a year earlier.

In the first seven months of 2018, the number of people (NUMBER OF PEOPLE OR NUMBER OF EMPLOYED PEOPLE?) in this age group fell by a monthly average of about 101,000, compared with a monthly decline of 44,100 people for the same period last year.

It was the worst seven-month figure since 2009, when the South Korean economy faced fallout from the credit crisis sweeping the globe.

Hit by the sharp decline in the number of employed workers in their 40s, South Korea reported growth in employment of just 5,000 jobs last month -- the weakest gain since January 2010.

Jobseekers wait in lines to enter a job fair organized by financial firms on Aug. 29, 2018. (Yonhap)

Experts attributed the poor jobs data to job cuts by labor-intensive auto and shipbuilding industries, which are losing competitiveness amid tougher (MISSING WORD?) and the rise of Chinese rivals.

Although some people opened their own stores after losing their jobs, small business owners have been struggling to stay afloat, with the recent rise in labor costs further hurting their bottom line.

The government jacked up the minimum wage by 16.4 percent to 7,530 won (US$6.62) per hour on Jan. 1 this year -- the biggest hike in nearly two decades. Next year's minimum wage has been set at 8,350 won, up 10.9 percent from this year.

Such hikes have raised concerns among local businesses, notably small and medium-sized firms and particularly small mom and pop stores, that the higher wages could undermine the entire economy.

"The employment situation for people in their 30s and 40s is locked in a vicious cycle because there are few business sectors that can hire people who lost jobs in the manufacturing sector," Ju Won, a senior researcher at the Hyundai Research Institute, said.

Some analysts have warned that the job market may further worsen down the road, as the nation's economy is at a crossroads amid an escalating trade row between the United States and China and stagnant private spending.

This undated photo shows a young man checking a bulletin board for job openings at a university campus in Seoul. (Yonhap)

"The trade row between China and the U.S. is causing the country's outbound shipment growth to slow, and private spending is weaker than expected," said Lee Keun-tae, an economist at LG Economic Research Institute. "There are worries that upward momentum is weakening."

The alarmingly weak employment market, meanwhile, is a painful blow to President Moon Jae-in, who made creating good jobs a top priority.

The latest poll by researcher Realmeter showed on Monday that Moon's approval rating stood at 56 percent last week, falling to a record low for the third consecutive week.

Moon has acknowledged a sharp slowdown in employment growth, but vowed to tackle unemployment with an expansionary fiscal policy.

"With a heavy heart, I look at the employment situation that is deteriorating rather than improving," Moon told a meeting with senior aides on Aug. 20, days after the July job data was released.

"The government has injected fiscal stimulus and implemented policies based on an administrative priority that focuses on increasing the number of decent jobs to ease the unemployment crisis. The end result, however, shows that our efforts have admittedly been insufficient," Moon said.

"Monthly employment statistics point to the fact that government policies are having some positive impact in some areas, but in other areas, they have not met expectation or are even having zero effect," the president added.

He went on, "Given the fact that tax revenue is expected to increase this year and next year, I hope that the government will actively execute its fiscal policy by making full use of the increase in revenue."

Earlier this week, the government proposed its biggest budget increase in a decade for next year, mainly focusing on job creation and addressing income inequality.

The government called for 470.5 trillion won for 2019, up 9.7 percent from this year. About 23.5 trillion won, a 22 percent increase on this year, will be used for job creation.

In a statement, the finance ministry said next year's budget for job creation will "increase social service jobs by 60,000 to 94,000 and civil service jobs, such as police officer and post office jobs, by 21,000."

Also, it will help the private sector hire "young adult employees and encourage middle-aged retirees, including the self-employed, to find jobs," according to the statement.

Kim Kwang-seok, a professor of economics at Hanyang University, urged the government to focus on encouraging companies to hire people, rather than resorting to the creation of public-sector jobs.

"There is a possibility that the sustainability of public-sector jobs will be temporary if they are created with state funds," Kim said. "If the government halts its expansionary fiscal policy, such jobs would simply disappear."

kdh@yna.co.kr
(END)

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