Korean Economy News
S. Korea’s unemployment allowance hits record $830 mn in May amid virus impact

[Photo by Lee Seung-hwan]

[Photo by Lee Seung-hwan]

State unemployment benefits reached over 1 trillion won ($830 million) for the first time in May, underscoring the surge in the number of those out of work due to coronavirus impact, data showed Monday.

According to data from the Ministry of Employment and Labor, unemployment check handouts amounted to 1.016 trillion won in May, up 33.9 percent from the same period last year. The allowance is given by the central government out of employment insurance fund to job seekers. They account for a majority of state unemployment benefits. It is the first time for the monthly allowance amount to exceed 1 trillion won since 1995 when the country introduced employment insurance system.

The sharp increase in job-seeking allowance comes as many Koreans lost their jobs due to coronavirus outbreak.

Last month, 111,000 new applications were submitted for the allowance, up 32.1 percent from 84,000 in the same month last year. The number of recipients jumped 34.8 percent to an all-time high of 678,000 in May.

The labor ministry said that the increase in paid allowance last month is due to a surge in new applicants, increase in per payment, and payment period extension.

Data showed that a total 13.82 million Koreans were subscribed to employment insurance in May, up 1.1 percent from the same period a year ago, settling from a sharp plunge in previous months due to employment shock amid coronavirus outbreak. The number of monthly employment insurance applicants had increased 376,000 in February, 253,000 in March, and 163,000 in April.

In May, the number of employment insurance subscribers in service sector reached 9.437 million, up 2.1 percent from a year ago. The number of subscribers in particular surged in public administration sector as the government put out efforts to create new jobs in non-face-to-face and outdoor jobs. The number of subscribers in health and welfare industry also increased 100,000.

The labor ministry noted that the employment shock in the service sector eased as the government began paying out emergency disaster relief funds from May 11 and schools gradually reopened.

The number of employment insurance subscribers in the wholesale and retail sector, however, increased 8,000, significantly less than 14,000 in April. The number of subscribers fell 3,000 in accommodation and food sector and 26,000 in business service sector that includes tourism industry in May due to business fallout from coronavirus pandemic. These industries have been hardly hit by COVID-19 as people mostly stayed indoors and maintained social distancing.

The number of employment insurance subscribers in manufacturing sector reached 3.529 million in May, down 1.5 percent from a year ago. The drop was mainly due to a fall in subscribers in electronics and communications sector and auto sector amid reduced production, consumption, and overseas shipments.

By age group, the number of employment insurance subscribers in their 40s increased 32,000 in May, 50s 106,000, and 60s and over 141,000. The number, however, fell sharply by 63,000 for those 29 years and younger and 62,000 for those in their 30s as companies reduced or postponed job recruiting.

By Lee Eun-joo

[? Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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