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S. Korea's employment-to-GDP ratio marks lowest in 2018

All Headlines 13:16 April 07, 2019

SEOUL, April 7 (Yonhap) -- The employment-to-gross domestic product (GDP) ratio fell to a fresh record low last year, data showed Sunday, as the South Korean economy is experiencing a technology-led development.

The ratio measures the number of newly employed workers per 1 billion won (US$878,000) of GDP, a gauge of people finding work in proportion to economic growth.

Data from the Bank of Korea (BOK) and the Korea Employment Information Service put the ratio at 16.79 last year, down to a new record low from 17.18 in the previous year.

The ratio was 43.1 in 1990. It fell to 29.6 in 1997, and since dipping to under 20 at 19.9 in 2009, it hasn't rebounded.

The speed of the fall is more alarming than the band of the decline.

The ratio lost 0.39 last year, marking the largest on-year drop since 2010 in the aftermath of the 2008 global financial crisis.

The gap between growth in the national economy and in employment was also widening, according to the data.

In 2017, South Korea's economy grew 3.1 percent, but the number of employed rose 1.2 percent. Last year, GDP expanded 2.7 percent, while employment edged up 0.36 percent.

The difference between the two expanded to 2.34 percentage points in 2018 from 1.9 percentage points in 2017.

Economy watchers say the ratio naturally falls with technological development as machines replace humans at production facilities.

In particular, the semiconductor industry has led the country's economic growth for recent years. Also some 20 percent of the country's total employed people were in the less labor-intensive service sectors like retail, wholesale and accommodations last year.

"It is less likely that employment will expand to a large extent this year," said Kim Hyeon-wook from the state-run Korea Development Institute (KDI). "We need to boost the service sectors that have a higher employment-to-GDP ratio, such as medical treatment, education and communication."

S. Korea's employment-to-GDP ratio marks lowest in 2018 - 1

brk@yna.co.kr
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