Virus brings 69% surge in payouts for jobless in Korea

Deck: Benefit recipients up 58,000 in Seoul in 6 months


[News Focus]

By Kim Yon-se

SEJONG -- The tally of recipients of unemployment benefits surged by 69 percent for the first six months of the year, when the novel coronavirus hit the nation.
In June, the government provided benefits to 718,921 people who lost their jobs, according to the Korea Employment Information Service. This marked an increase of more than 290,000, compared to 425,390 people in December 2019.
Starting in January, when the first confirmed case of COVID-19 was reported in South Korea, the payouts for the jobless continued to increase -- 543,283 in February, 618,081 in March, 660,464 in April and 686,141 in May.
Except for Gangwon Province, 16 of 17 major regions across the nation saw the number of recipients reach an all-time high.
Seoul posted a figure above the nationwide average growth rate, as the tally in the capital climbed by 72.6 percent (or 58,506) from 80,484 to 138,990 over the corresponding period.
Seoul also outstripped Daegu, whose number of COVID-19 patients is the most among the 17 regions. The latter posted a 67.3 percent in growth of recipients.
“It is estimated that a large portion of those engaged in the tourism and airline industries have been out of work. A dominant portion of businesses in the two sectors are headquartered in Seoul,” said a labor research analyst.
Among the country’s eight major cities, Seoul ranked second in the unfavorable growth, while Ulsan, a manufacturing oriented city, topped the list with 82.2 percent -- from 10,205 to 18,600.
The cities were followed by Incheon at 71.7 percent, Daejeon with 70.1 percent, Daegu at 67.3 percent, Gwangju at 65.4 percent and Sejong at 63.7 percent. Busan had the lowest rate, at 62.5 percent.
When it comes to 17 areas (eight cities plus nine provinces), Jeju Province recorded the highest with 126.2 percent from 4,403 in December 2019 to 9,960 in June 2020.
Though Koreans are choosing Jeju, the nation’s largest island, as a substitute for overseas tourist destinations amid the epidemic, the damage from a low number of inbound tourists could be serious.
Alongside those working in the tourism industry, the virus has dealt a severe blow to the self-employed, such as those running coffee shops, or others on the island.
The regions whose growth rate exceeded the nationwide average of 69 percent were South Gyeongsang Province (78.1 percent), North Jeolla Province (76.8 percent) and North Gyeongsang Province (72.6 percent).
While Gyeonggi Province, the nation’s most populous area, posted 63.1 percent, the figure for South Jeolla Province (59.6 percent) was the lowest among the 17 regions.
The virus aggravated social worries over the fiscal soundness as the government’s benefit payouts have increased rapidly over the past decade.
In the early and mid-2010s, the yearly payouts for jobless people ranged between 3.3 trillion won ($2.7 billion) and 4.5 trillion won ($3.7 billion), according to the KEIS.
The figure recorded 4.67 trillion won in 2016 during the previous administration amid moderate growth in the volume of unemployment benefits.
But the situation began to change in 2017 as the nation saw microbusinesses close en masse. Self-employed people accounted for about 25 percent of all working people and have faced a tight job market.
The volume of unemployment benefits has increased sharply over the past three years, reaching 5 trillion won in 2017, 6.43 trillion won in 2018 and an all-time high of 8.07 trillion won in 2019.
The 2019 figure marked a 72.8 percent (or 3.4 trillion won) surge compared with 2016.
Further, compared with five years earlier -- in 2014, when benefits paid out amounted to 3.96 trillion won -- the 2019 payouts constituted a 103.7 percent surge.
(kys@heraldcorp.com)

Caption: A view of Naejang Mountain in North Jeolla Province, which ranked fourth in growth of unemployment benefits for the jobless among the 17 major cities and provinces in South Korea. The province posted a 76.8 percent surge in payouts over the past six months. (Jeongeup City)