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‘IMF generation’ feels job shortage

Nov 18,2019
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Mr. A, 42, recently visited a government employment center in Ulsan to collect unemployment insurance.

Mr. A’s career has been typical for his generation. He entered the job market right after graduating high school, which was in 1996 - shortly before postwar Korea’s worst economic crisis.

As the Asian economic crisis hit Korea hard, A struggled to land a stable job. Most jobs he landed were temporary, and he moved from one job to the next.

He recently worked for nearly two years at an automotive part supplier in Ulsan. When he was laid off, he wasn’t surprised.

“With the increase in production of electronic vehicles, finding jobs [for older people] is becoming harder,” he said. “I have seen many cases where workers in their 40s, who are caught between people in their 30s that have recently been hired and skilled workers in their 50s, are being let go despite the experience they offer.”

People in their 40s are dubbed the “IMF generation.” In Korea, the economic crisis of the late 1990s is frequently called the IMF crisis because of the major role that the institution took in bailing Korea out - at a heavy price to companies. At that time, the idea of lifetime employment shriveled and died in Korea.

The generation that came into the workforce then has struggled to find security ever since - even two decades later.

According to Statistics Korea, the number of people in their 40s shrunk 1.4 percent in October 2018 and 1.5 percent in October of this year. In both years, however the number of people in their 40s that were employed shrunk 2.2 percent compared to the year-earlier periods.

This proves that the number of jobs for middle-aged people is shrinking faster than the population itself.

It is the only age group to be losing jobs so rapidly.

Among all age groups, people in their 40s saw the sharpest declines in the number of people employed over the last two years.

In 2017, the employment rate for people in their 40s was 79.8 percent, which fell to 78.5 percent this year.

This year, the number of people in their 40s who are no longer actively engaged in the economy grew 3.6 percent. That’s sharper than the overall increase in such people aged 15 years old or older, which was a very low 0.2 percent.

Employment for people in their 40s is important for any country. Those workers are in their prime and many have children to raise.

The statistics agency blames a stagnant manufacturing industry for their job losses.

Last month, the number of people working in Korean manufacturing shrunk 1.8 percent, which translates into 81,000 jobs. The manufacturing industry has been losing jobs for 19 consecutive months.

When including people in their 30s, jobs for people in their 30s and 40s have been declining consecutively for 25 months.

Analysts say a chain of problems in the private sector has affected the manufacturing, wholesale and retail sectors.

“The fact that the private sector’s economic growth contribution is lower than the public sector’s - despite the fact that we’re not in an economic crisis like in the 1990s - indicates that the growth engine of the private sector has stopped,” said Kim Dong-won, a former Korea University visiting professor of economics. “People in their 30s and 40s are the ones that are directly affected most.”

The government agrees with this assessment.

“The answer to the job [problem] for people in their 30s and 40s is creating jobs in the private sector by expanding investments and exports,” said Finance Minister Hong Nam-ki on Nov. 11 during a press conference.

One problem is that government job and population policies are focused on older people who are facing retirement, or poverty among senior citizens.

It’s hard to pinpoint any policies aimed at helping workers in their 30s and 40s.

Welfare spending for housing for senior citizens, job projects for elderly people and tax benefits for retirement and private pension schemes for people aged 50 or older continue to grow.

“[The government] needs to ease regulations so that high-value industries can be created and push tax cuts that will help companies increase their investments,” said Kim Won-shik, a Konkuk University economics professor. “Only then will the private sector revive and jobs for people in their 30s and 40s increase.”

BY KIM DO-NYUN [lee.hojeong@joongang.co.kr]