Unemployment Rates Soaring in South Korea

Even prior to the COVID-19 outbreak, South Korea was fighting the issue of soaring unemployment rates across the nation. Now that coronavirus has devastated most of the country, the fight to lower the unemployment rate of the nation will be even harder. The manufacturing industry in South Korea had been in a period of slowdown for nearly two consecutive years with no sign of regaining momentum in a positive direction. In addition, jobs suitable for older employees (ages 40 and older) have also continued to decline across the nation. Overall, the unemployment status of the country was already troubling before COVID-19 came along.

We are at a point right now at the end of March 2020 where production and exports of goods has drastically declined as the world goes on lockdown to prevent any further devastation due to the pandemic. As we are seeing in many other developed nations – the threat of the pandemic is putting many small businesses and self-employed individuals at major risk of declaring bankruptcy and becoming financially insecure. The idea that any ‘non-essential’ business can make it through this pandemic without any problem is highly unlikely as employees are being laid off (either temporarily or permanently) from their jobs.

In South Korea, the pressure to keep jobs is very high when compared to other nations. With an unemployment rate that was spiking prior to any COVID-19 crises and shutdowns, it has become increasingly difficult to secure any form of employment here. The devastation that these job losses will cause will be seen for years as the economic downturn will affect the household economy and make it harder to raise educated children.

Other nations like the USA and Canada have created emergency benefit funds to attempt to reduce the amount, severity, and duration of the financial devastation that COVID-19 is causing across the world. South Korea is wise to create such government funds in order to help the citizens sustain themselves through this period and get back to a state where the unemployment rate is lower and livelihoods can be maintained. Since the outbreak of COVID-19 in South Korea, a total emergency relief package of over $81 billion USD has been enacted with the sole intention of protecting as many jobs as possible; however, due to the unprecedented number of businesses filing for wage subsidies since the start of 2020 (almost 18,000 businesses in total – during this period same period in 2019, under 1700 businesses had filed for wage subsidies), the application and approval process to receive government assistance has been backlogged and overwhelmed by the sheer number of applications received.

As with any time of crisis, small businesses and self-employed individuals are those that tend to be hit the hardest and fastest when it comes to economic disparity. It is important, not just in South Korea, but in all nations providing government assistance at this time, not to turn a blind eye to those two groups when it comes to government subsidies. The government of South Korea is in the process of building an economic safety net, but also needs to focus on how this economic assistance can reach those in the greatest need in the shortest amount of time possible.

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