Manufacturing jobs disappearing fast in Korea

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Manufacturing jobs disappearing fast in Korea

By Jhoo Dong-chan

The number of the country's manufacturing jobs declined by 126,000 last month compared to the previous month, the largest drop since January last year.

The figure has also declined for three months in a row, adding more woes to the nation's prolonged sluggish job market. Industry observers said the trend is likely to continue for the time being until companies recover from stagnant sales in export markets.

According to Statistics Korea, Thursday, the number of employed people in June was 27.12 million, up only 106,000, or 0.4 percent, from a year ago.

Due to stagnation in manufacturing, Korea only added 104,000 employees in February, the first time the number fell below the 110,000 level in 22 months.

The number failed to climb above that level for three months and even plunged below 100,000 in May.

It recovered a little to reach above 100,000 last month, but the January-June period demonstrated the nation's poorest employment situation since the global financial crisis struck Korea in 2008.

"It seems that firms managed to maintain the status quo by lowering their fixed costs. This trend won't help add more jobs," a Statistic Korea official said.

Industry observers attributed the nation's sluggish job market to a long slump in manufacturing as well as the drastic minimum wage hike.

"The nation's shipyards have not yet recovered from the order cliff, while domestic carmakers are experiencing difficulties in overseas markets," said an economist at Hyundai Research Institute.

"The ongoing trade war between the U.S. and China is another negative factor clouding their outlook in the second half. The U.S. is also reviewing a plan to impose heavy tariffs on imported automobiles. If it does, it will deal a huge blow to not only domestic carmakers but also their subcontractors," he said.

The minimum wage hike is another reason behind the sluggish job market.

The Moon Jae-in administration claims that the hike will help raise people's incomes and consequently boost spending that will encourage hiring, but a former Statistics Korea official and now Korea Advanced Institute of Science and Technology (KAIST) professor Yoo Gyeong-joon rejects this idea.

"The country's youth unemployment rate has been above 10 percent for months. Due to this year's minimum wage hike of 16 percent, the number of job openings in the unskilled labor and services sectors has plunged dramatically," Yoo said.

"Small- and medium-size businesses are tightening their labor costs. Investment psychology is at its worst at the moment. Conglomerates have already downsized their recruitment for this year and the trend will continue for awhile."



By Jhoo Dong-chan

The number of the country's manufacturing jobs declined by 126,000 last month compared to the previous month, the largest drop since January last year.

The figure has also declined for three months in a row, adding more woes to the nation's prolonged sluggish job market. Industry observers said the trend is likely to continue for the time being until companies recover from stagnant sales in export markets.

According to Statistics Korea, Thursday, the number of employed people in June was 27.12 million, up only 106,000, or 0.4 percent, from a year ago.

Due to stagnation in manufacturing, Korea only added 104,000 employees in February, the first time the number fell below the 110,000 level in 22 months.

The number failed to climb above that level for three months and even plunged below 100,000 in May.

It recovered a little to reach above 100,000 last month, but the January-June period demonstrated the nation's poorest employment situation since the global financial crisis struck Korea in 2008.

"It seems that firms managed to maintain the status quo by lowering their fixed costs. This trend won't help add more jobs," a Statistic Korea official said.

Industry observers attributed the nation's sluggish job market to a long slump in manufacturing as well as the drastic minimum wage hike.

"The nation's shipyards have not yet recovered from the order cliff, while domestic carmakers are experiencing difficulties in overseas markets," said an economist at Hyundai Research Institute.

"The ongoing trade war between the U.S. and China is another negative factor clouding their outlook in the second half. The U.S. is also reviewing a plan to impose heavy tariffs on imported automobiles. If it does, it will deal a huge blow to not only domestic carmakers but also their subcontractors," he said.

The minimum wage hike is another reason behind the sluggish job market.

The Moon Jae-in administration claims that the hike will help raise people's incomes and consequently boost spending that will encourage hiring, but a former Statistics Korea official and now Korea Advanced Institute of Science and Technology (KAIST) professor Yoo Gyeong-joon rejects this idea.

"The country's youth unemployment rate has been above 10 percent for months. Due to this year's minimum wage hike of 16 percent, the number of job openings in the unskilled labor and services sectors has plunged dramatically," Yoo said.

"Small- and medium-size businesses are tightening their labor costs. Investment psychology is at its worst at the moment. Conglomerates have already downsized their recruitment for this year and the trend will continue for awhile."



Jhoo Dong-chan jhoo@ktimes.com
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