Manufacturing job forecast remains cloudy

By Park Hyong-ki

The number of jobs created in March stood at 250,000 on the back of job growth in welfare, information technology and agriculture, according to Statistics Korea, Wednesday.

This is the second straight month for the new job total to reach over 200,000.

The employment rate for March stood at 60.4 percent, the highest figure for this month since the statistics agency began compiling monthly data in July 1982

On the surface, the job market may seem to be picking up after falling well below 100,000 for a number of months.

But beneath this, analysts say the quality of jobs has not been improving, forecasting continuous job losses in manufacturing.

These were down 108,000 in March from a year ago, dropping for the 12th straight month.

With weak job growth in the private sector, analysts say it is, at least, positive to see the public sector backed by fiscal spending increasing hiring.

But the market faces a dilemma, they said, questioning the sustainability of public employment.

"It's a dilemma because we know manufacturing jobs will further decrease going forward as the sector will increasingly employ plant automation. Public jobs in welfare, which are needed, are filling the gap," said Hong Sung-guk, an independent economist who heads Hyean Research.

Analysts are asking how long the public sector can manage to do this.

Hong Sung-il, an analyst at the Korea Economic Research Institute (KERI), said such public jobs created through short-term fiscal spending were "not really sustainable."

Also, the monthly increase in welfare and agriculture jobs indicates that overall quality is not improving.

They are categorized as low-paying jobs, with agriculture's economic value in proportion to gross domestic product remaining "extremely low."

Last year, the number of jobs created in agriculture stood at 1.3 million. But less than 15 percent of them were actually at incorporated farming companies, according to KERI.

"The monthly data aren't sufficient enough to analyze the overall trend. But it seems the employment pattern remains similar to that of 2018 ― an increase in low-paying jobs, fewer opportunities for those in their 40s and worsening quality," said Hong.

The employment rate for the 40s group has been declining for 13 consecutive months, with 168,000 people being made redundant because of the downturn in manufacturing and among the self-employed.

Meanwhile, the number of new jobs for the elderly stood at 346,000 last month due to the state hiring program, which started in January, three months ahead of its initial schedule.

Kim Doo-un, an economist at KB Securities, agreed that worsening job quality was a concern.

He forecast jobs in manufacturing driven by semiconductors will remain weak despite an economic rebound in China toward the end of the year.

"This is because semiconductor's not a labor-intensive sector, but a capital-intensive one," Kim said.

Finance Minister Hong Nam-ki said his ministry will use part of its planned supplementary budget to create jobs amid the uncertainty.

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