[News Focus] Age gap observed in unemployment benefits


A man applied for unemployment benefits at a regional office of the Center for Employment and Welfare Plus in Seoul earlier this year. (Yonhap)

SEJONG – Recent data from a state-funded agency suggests that South Koreans in their 20s and 60s have been hit hardest by the novel coronavirus in terms of job security, with a notable disparity between generations – or somewhat according to gender at same age groups – in the process of being published.

This is shown by a comparison of unemployment benefits paid to people who have lost their jobs or closed small businesses, offered by the Korea Employment Information Service. Its data provides the growth in the count of benefit recipients by generation and sex.

Among the top 10 working age groups – those in their 20s, 30s, 40s, 50s and 60s by gender – men and women in their 20s, and men and women in their 60s were the top four in benefit recipient growth since December 2019, a month before COVID-19 initially hit the country.

Men in their 20s lead the list, with the number of beneficiaries increasing 96.2% from 21,051 in December 2019 to 41,314 in February 2021. Men in their 60s rank second with an increase by 94.3%, from 56,729 to 110,228.

During the corresponding period, No. 3 and No. 4 were women in their twenties and women in their sixties, respectively, with an increase of 87.8% to 64,160 and 86.8% to 68,020 .

(Graphic by Kim Sun-young / The Korea Herald)

(Graphic by Kim Sun-young / The Korea Herald)

This de facto means that young workers with lower expertise and shorter careers have been the main target of layoffs over the past year in the corporate sector. A Seoul-based employee in a tourism industry said “his company had no choice but to initially lay off people in their twenties in the second and third quarters of last year.”

In addition, many young people in their twenties working as contractors in the service sector involving convenience stores and cafes could be the main victims.

At the same time, it is estimated that a large part of the self-employed have closed their micro-businesses or suffered huge declines in their sales. A large proportion of Korean workers in their 60s are in non-regular employment or own a microenterprise.

“It is irrefutable that temporary or part-time workers in their 60s could be a primary target for layoffs in this unexpected recession of last year (negative 1% year-on-year GDP growth),” said a researcher on work.

People in this occupation could also receive unemployment benefits when their percentage of sales drop reaches the ceiling set by the government, provided they have paid premiums to state-run employment insurance.

The No.5 was men in their 50s with an increase of 57.2% during the period December 2019-February 2021, followed by women in their 40s with 55.4%.

Next come men in their forties at 48% and women in their fifties at 46%. It is estimated that many of the benefit recipients in these two groups were self-employed.

Data from KEIS showed that male and female beneficiaries in their 30s posted the smallest (40.1%) and second smallest increase (44.2%) in the tally, although the numbers were not negligible. This indicates that companies have been relatively reluctant to lay off workers at some stage in their careers.

More serious is the fact that a growing part of the younger generation has become independent, such as food retailers or cafe owners in recent years.

Although the government has offered young small business owners grants such as low-interest loans, uncertainty over their survival in the market could increase if a longer-than-expected pandemic phase continues.

Meanwhile, more and more researchers are raising the possibility that the state’s reserves for payments to the unemployed will run out in the medium term amid the continued renewal of record levels in monthly or annual payment balances.

By Kim Yon-se ([email protected])

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