S. Korea's young people face worst labor market in a decade: data

SEOUL, June 28 (Yonhap) -- The number of employed people in their 20s and 30s in
South Korea fell at the fastest pace in a decade this year as companies remained
reluctant to recruit workers amid uncertain business outlooks, government data
showed Sunday.
According to the data provided by the National Statistical Office and the Bank of
Korea, the nation's central bank, the number of people on payrolls in these two
age groups totaled an average of 9.62 million during the January-May period, down
322,000 from a year earlier.
The decline was the steepest since 1999 when 418,800 working positions were
eliminated during the same five-month period, just after the nation was hit by
the Asian financial crisis.
"The sharp decline is attributable to the fact that worsening business conditions
caused companies to refrain from additional recruitment, while workers with
short-term contracts lost their jobs," an BOK official said.
The bleak data comes as South Korea's government steps up spending to create jobs
and bolster slumping domestic demand as part of an effort to accelerate an
economic revival. Its 28.4 trillion won extra budget passed in April focuses on
generating jobs.
Despite such efforts, there are few signs that the frozen labor market will
improve soon.
In May, South Korea's jobless rate stood at 3.8 percent, unchanged from a month
earlier though job loss accelerated with a total of 219,000 positions eliminated
from payrolls, according to earlier data. The decline was the steepest reduction
since March 1999.
In its economic management plan unveiled last week, the finance ministry
predicted the economy will lose around 100,000 to 150,000 jobs annually this
year. That was slightly better than the 200,000 job losses it predicted in April.
The outlook was based on a projection that South Korea's economy will shrink 1.5
percent this year, better than the government's earlier forecast of a 2 percent
contraction.
But market observers remain pessimistic, worrying that an envisioned
government-led corporate restructuring effort may drive smaller companies out of
business, causing available working positions to decline further down the road.
kokobj@yna.co.kr
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