The rapidly increasing number of unemployed workers following financial support from the IMF has become an immense social problem in Korea. The current unemployment situation has even been dubbed a "major crisis."
Statistics on unemployment announced by the government, however, are problematic because they fail to present accurate unemployment rates. In particular, current data on the unemployment of women is unknown, despite the fact that women are the most likely candidates for dismissal in the course of company structural admustment plans.
The failure to compile accurate unemployment statistics for women largely can be attributed to the family ideology which views the man as the breadwinner and the woman as his dependent.
In this article I will try to determine how financial support from the IMF has affected and changed the employment of women in Korea. Since the most recent employment and unemployment data (April 1998) is not yet available, this article does not include the most up-to-date information. However, KWWAU is continuing to conduct research on women's unemployment of women. The latest data will be included in my forthcoming studies.
The Decrease in the Economically Active Population
Prior to financial support from the IMF, the economically active population had steadily increased. However, its growth rate started to slow down during the latter half of 1997, when the current economic crisis initially became visible.
In November of the same year the economically active population decreased for the first time. From November 1997 to the present (February 1998), the rate has continued to drop.
Since October 1997, the period before the IMF provided Korea with financial support, the rate of participation in economic activities has decreased to a paltry 59.2%. The number of employed persons, compared to the same period last year, has decreased by 1,033 persons.
When we examine gender differentials in these statistics, we find that the number of employed men decreased by 205,000 persons while the number of employed women decreased by 827,000 persons during the same period. In other words, women constitute more than 80% of the total unemployed population (See Table 1).
Table 1.
(Unit: 1000 persons; %)
|
Economically Active Population |
Employed Population |
Rate of Participation in Economic Activities(%) |
Month/Year |
Total |
Male |
Female |
Total |
Male |
Female |
Total |
Male |
Female |
August 1997 |
21,773 |
12,860 |
8,913 |
21,308 |
12,563 |
8,745 |
62.6 |
76.1 |
49.8 |
September 1997 |
21,779 |
12,830 |
8,949 |
21,310 |
12,530 |
8,780 |
62.5 |
75.8 |
49.9 |
October 1997 |
21,793 |
12,826 |
8,967 |
21,341 |
12,536 |
8,805 |
62.5 |
75.7 |
50.0 |
November 1997 |
21,762 |
12,840 |
8.922 |
21,188 |
12,473 |
8,715 |
62.3 |
75.6 |
49.7 |
December 1997 |
21,340 |
12,719 |
8,620 |
20,682 |
12,299 |
8,383 |
61.0 |
74.8 |
47.9 |
|
January 1998 |
20,645 |
12,577 |
8,068 |
19,711 |
11,959 |
7,752 |
58.9 |
73.9 |
44.8 |
February 1998 |
20,760 |
12,621 |
8,140 |
19,526 |
11,801 |
7,725 |
59.2 |
74.0 |
45.2 |
From Monthly Statistics of Korea, published by the National Statistics Office
During the same period last year, the unemployed population increased by 722,000 persons in March 1998. Therefore, we find that the women's rate of participation in economic activities dropped from 49.3% in 1997 to 46.8% this year (See the April 27, 1998, issue of the daily Hankyoreh).
Such a decrease may be attributed to the "disappointed laborer" effect,
"Disappointed laborer"designates those individuals among the unemployed population who have given up trying to find employment based on the assumption that it is near impossible to find a job. Persons belonging to this category are difficult to classify as "unemployed" because they have voluntarily dropped out from the labor market and consequently are likely not to join the labor market once again, in spite of government policy to create employment opportunities. In such a case, the unemployment rate will not decrease and inflation may even rise, resulting in a total failure of the policy (Cho Song-hye, Current Data on the Unemployment of Women and Tasks for Employment Stabilization Policy, page 37; cited in the 2nd quarter, 1998, issue of Analysis of Current Labor Situation Per Quarter, published by the Korea Labor Institute).
which means that, women who no longer have any employment opportunities due to the economic recession voluntarily drop out of the labor market.
Such a decrease in the economically active population, however, is not expected to continue for a long time. When large scale corporate restructuring is implemented, the consequential dismissal of men, who are the major source of income for most families in Korea, will have serious repercussions on the economic status of many families. As a result, other family members who previously have never worked are likely to join the economically active population in order to sustain their families.
The Decrease in the Employed Population
Although the employed population increased up until the latter half of 1996, the growth rate had visibly slowed down. It rose by a mere 1.4% in 1997. In December 1997, it decreased for the first time since September 1984.
This year, the decrease in the employed population has become particularly severe, dropping by -3.4% in January when compared to the same period in 1997 (See page 16 of the 1st quarter, 1998, issue of Analysis of Current Labor Situation Per Quarter, published by the Korea Labor Institute).
In February 1988 the employed population consisted of 19,526,000 persons (See Table 1). Since the period in which financial support from the IMF began, the employed population has decreased by 8.5%.
The growth rate of employed women has drastically slowed down in comparison to that of men. When we compare the present statistics to those in October 1997, we see that the number of employed men fell by 5.8% whereas the number of employed women decreased by as much as 12%, which is almost double the figure for men. We can see from such statistics that the current economic crisis is having a far more adverse effect on women than on men.
In the manufacturing industry the total employed population is significantly dropping, with its declining rate accelerating in January 1998 (See Table 2). The manufacturing industry can be divided into the light industry and the heavy chemical industry.
The number of employed persons in the latter of the two industries, which had steadily increased over the past years, dropped for the first time in 1997. Much of the decreasing employment can be attributed to the increase in plant closures and bankruptcies.
The financial crisis that Kia Motors and the Hanbo Group experienced last year resulted in massive bankruptcies for many related companies in the heavy chemical industry. As a result, the total number of workers in this industry, which amounted to 2,416 persons in 1996, dwindled to 2,361 in 1997, representing a -2.3% change.
Table 2. The Currently Employed Population Per Industry
(Unit: 1000persons; %)
|
Agriculture,
Fishery and
Forestry |
Mining |
Social Infrastructure and Other Service Industries |
|
Manufacturing |
|
Construction |
Others |
1994 |
2 699 |
4 735 |
4 695 |
12 403 |
1 777 |
10 626 |
1995 |
2 541 |
4 799 |
4 773 |
13 037 |
1 896 |
11 141 |
1996 |
2 405 |
4 701 |
4 677 |
13 657 |
1 968 |
11 689 |
1997 |
2 324 |
4 501 |
4 474 |
14 223 |
2 004 |
12 219 |
1997 10 |
2 557 |
4 456 |
4 427 |
14 328 |
2 058 |
12 270 |
11 |
2 306 |
4 497 |
4 471 |
14 385 |
2 026 |
12 359 |
12 |
1 917 |
4 433 |
4 409 |
14 332 |
1 966 |
12 366 |
1998 1 |
1 856 |
4 219 |
4 196 |
13 637 |
1 761 |
11 876 |
From the April 1998, issue of Monthly Statistics of Korea, published by the National Statistics Office
In addition, the growth rate of the employed population in the social infrastructure and the service
industries, two fields that have expanded over the years, slowed down in 1997.
In January 1998, it decreased for the first time. Within the service industry, the growth rate of retail and wholesale businesses, the lodging industry, the catering industry, and the construction industry slowed down significantly in comparison to the previous year due to the continuing economic recession; general businesses, personal services, and public services, on the other hand, showed a considerable growth rate (See page 14 of the 1st quarter, 1998, issue of Analysis of Current Labor Situation Per Quarter, published by the Korea Labor Institute).
Another noteworthy phenomenon that has occurred following financial support from the IMF is the increasing growth rates in the employed population in the agriculture, fishery and forestry fields.
Until February 1988, the number of workers in the employed population in these sectors had been steadily decreasing. However, in March 1998 this number increased by 369,000 persons in comparison to the previous month, totaling 2,344,000 persons.
This increase has continued into April with a total of 2,673,000 persons currently working in these fields. This 8.8% rise in participation in April in comparison to the same period last year represents a significant increase.
This increase may be attributed to the rising number of persons who wish to return to the provinces as well as the number of unemployed persons who actually return to their provincial homes. Among all industries, agriculture, fishery, and forestry represent the only fields to witness a rise in the employed population (See the April 27, 1998, and May 23, 1998, issues of the Hankyoreh).
The Increase in the Unemployed Population
Due to the fact that the total number of persons not participating in economic activities has increased and the total number of persons participating in economic activities has drastically decreased following financial support from the IMF, the unemployed population
According to unemployment surveys conducted by the National Statistics Office, "unemployment" designates those individuals who have no remunerative work whatsoever during the period that the surveys are conducted.
The following individuals are included: immediately employable persons who are actively seeking work; persons who, although they were able to do so in the past, have been unable to seek work actively due to inevitable reasons such as adverse weather, delayed confirmation of new employment, temporary illness, and preparation for self-employment.
In addition, the "unemployed" category encompasses the following individuals: persons who have worked for over 1 hour for profit; family members who, although themselves without work or economic gain, have assisted in raising the profits work or companies of their own, have been unable to work and thus have been temporarily jobless during the survey period due to reasons such as temporary illness, adverse weather, leaves of any length, or labor strikes (See Kim Pyong-suk, Women's Strategies for Employment in an Era of Massive Unemployment, page 3).
continues to rise. This may be attributed to the slowdown in the overall ability of the national economy to absorb potential employees, as exemplified by the increasing number of business closures and bankruptcies due to economic crisis and by the considerable decrease in new employment opportunities due to the retrenchment policies of various companies.
As of March 1998, the unemployed population exceeded 1,300,000 persons (1,378,000 persons, to be exact). In April, the total number of unemployed persons amounted to 1,434,000, which constituted an all-time high. This statistic represents an increase of 60,000 persons when compared to the figure for the previous month. This means that 3,000 persons per day on an average have been their losing jobs.
However, when we take into consideration the growing rate of those who are unstably employed, the anxiety felt by the general public over potential unemployment actually is far higher than the 3,000 persons cited above.
The unemployment rate has risen to 6.7%, which is a 0.2% increase when compared to the figure for March 1998. The current rate is an all-time high since February 1986, which was exactly 12 years and 2 months ago. (See the May 23, 1998, issue of the Hankyoreh).
After 1980 the unemployment growth rate steadily decreased, only to start increasing in 1997. In November and December 1997, the unemployment rate rose by 0.5%, respectively, when compared to previous months. In January and February 1998, the respective growth rates increased to 1.4% which shows that the total number of unemployed persons has risen drastically following the financial support form the IMF.
Although the growth rate slowed down somewhat in March and April when compared to January and February, a dramatic rise in unemployment is expected to become far more pronounced starting in June 1998, when massive corporate restructuring is scheduled to take place (See Table 3).
Along gender lines, the unemployment rate of women increased by 3.3% when compared to the figure for October 1997 whereas the unemployment rate of men increased by 4.2% during the same period. The growth rate of women's unemployment slowed down in March 1998, which may be attributed to the fact that married women have given up trying to find a new job.
The actual number of women who wish to be employed is expected to far surpass government statistics. This is because, as has already been mentioned above, many women, as disappointed laborers, belong to the category of persons not participating in economic activities.
According to the April 17, 1998, issue of the Hasnkyoreh, women make up 81% of the total number of persons not participating in economic activities as of March 1998.
Table 3. The Unemployed Population and the Current Rate of Unemployment
(Unit: 1000 person; %)
|
Total |
Male |
Female |
1997 8 |
465(2.1) |
297(2.3) |
168(1.9) |
9 |
469(2.2) |
300(2.3) |
169(1.9) |
10 |
452(2.1) |
290(2.3) |
161(1.8) |
11 |
574(2.6) |
367(2.9) |
207(2.3) |
12 |
658(3.1) |
420(3.3) |
238(2.8) |
1998 1 |
934(4.5) |
617(4.9) |
317(3.9) |
2 |
1,235(5.9) |
820(6.5) |
415(5.1) |
3*1 |
1,378(6.5) |
(7.3) |
(5.2) |
4*2 |
1,434(6.7) |
|
|
From the April 1998, issue of monthly Statistics of Korea, published by the National Statistics Office
*1: See the April 27, 1998, issue of the Hankyoreh
*2:: See the May 23,, 1998, issue of the Hankyor
In 1992, 11.4 times more persons who wished to find jobs yet were not actively seeking work existed than completely jobless persons. When the former group is included in the calculation, the total unemployment rate surpasses 20% (See Cho Soon-kyung,
The IMF Conditions and the Employment of Women, page 3). This year, in particular, even more of the work force is assumed to belong to the category of disappointed laborers when compared to the situation in 1992, due to the overall confusion brought about by the continuing economic recession, massive unemployment, and the severe difficulty in finding jobs.
When we take into consideration the fact that a majority of these disappointed laborers are women, the percentage of women among the total unemployed population is expected to be far greater than the figure for 1992.
According to the Ministry of Labor's current analysis of the disbursement of the unemployment benefit, the total number of persons who are involuntarily unemployed has increased drastically following the financial support from the IMF.
The daily average of new recipients of the unemployment benefit was 65 persons in 1996. This figure increased to 292 persons in December 1997. In January 1998, the number skyrocketed to 931 persons, which is over 14 times the figure for the pre-IMF support year of 1996 (See Table 4)
Table 4. New Recipients of the Unemployment Benefit per Type of Unemployment (Average Per Day)
(Unit: 1person; %)
|
1996. 7-12. |
1997. 1-11. |
1997. 12. |
1998. 1. |
Total |
65(100) |
158(100) |
292(100) |
931(100) |
Closure, Bankruptcy |
16( 24.6) |
45( 28.5) |
72( 24.7) |
205( 22.0) |
Retirement due to Business Reasons or Employer's Recommendation |
34( 52.3) |
66( 41.8) |
153( 52.4) |
551( 59.2) |
Retirement due to Age Limit |
8( 12.3) |
19( 12.0) |
15( 5.1) |
81( 8.7) |
Voluntary Retirement |
2( 3.1) |
4( 2.5) |
11( 3.8) |
16( 1.7) |
Others |
6( 9.2) |
24( 15.2) |
41( 14.0) |
77( 8.3) |
From page 21, the 1st quarter, 1998, issue of Analysis of Current Labor Situation Per Quarter, published by the Korea Labor Institute
Table 5. New Recipients of the Unemployment Benefit Resulting from retirement due to Business Reasons or Employer's Recommendation(Average Per Day)
(Unit:1person;%)
|
1996. 7-12. |
1997. 1-11. |
1997. 12. |
1998. 1. |
Total |
34(100.0) |
66(100.0) |
153(100.0) |
551(100.0) |
Fewer than 30 persons |
1( 2.1) |
2( 3.0) |
6( 3.9) |
16( 2.9) |
30-299 persons |
14( 40.2) |
31( 47.0) |
72( 47.1) |
327( 59.3) |
More than 300 persons |
19( 57.8) |
33( 50.0) |
75( 49.0) |
209( 37.9) |
From page 21, the 1st quarter, 1998, issue of Analysis of Current Labor Situation Per Quarter, published by the Korea Labor Institute
In addition, retirement by recommendation occurs far more often in the case of small and medium companies rather than in the case of conglomerates, which employ a considerable number of work force. (See Table 5)
If we classify various firms as "small and medium companies" or "conglomerates" with 300 laborers as the dividing line (300 and fewer or 300 and more), laborers who retired on recommendation took up 42.3% of the total unemployed population in the case of small medium companies in 1996, whereas the same figure increased to 50.0% in January - November 1997 and 62.2% in January 1988.
This drastic increase is due to the fact that, until now, employment adjustments have occurred mainly among small and medium companies and needy businesses. With the in-depth implementation of restructuring among conglomerates and banks in June 1998, however, the unemployment crisis is expected to spill over to huge corporations as well.
Up until the first half of 1997, the categories of persons affected by employment adjustment consisted mainly of high school graduates and lower in terms of educational level as well as 40 and above in terms of age.
Due to the business closures and bankruptcies of many companies, however, white-collar office workers have come to be the included among the targets of employment adjustment as well. As a result, the number of highly educated jobless persons in their 20's and 30's has been increasing (See Table 6). As of April 1998, those who previously held jobs amounted to 1,322,000 persons (See the May 23, 1998, issue of the Hankyoreh).
However, because conglomerates are resisting the employment of new workers, the total number of newly unemployed individuals is expected to continue increasing. In particular, there is a high likelihood of a rise in the rate of new unemployment among university and college graduates.
If college graduates consequently lower their expectations in selecting jobs, the employment crisis among those with lower educational levels is expected to become even more drastic.
Table 6. New Recipients of the Unemployment Benefit Per Age and Educational Level
(Unit : 1 person ,%)
|
1996. 7-12. |
1997. 1-11. |
1997. 12. |
1998. 1. |
Total |
34(100.0) |
66(100.0) |
153(100.0) |
551(100.0) |
Below29 |
1( 2.9) |
4( 6.1) |
15( 9.8) |
62( 13.8) |
30-39 |
6( 17.6) |
16( 24.2) |
35( 22.9) |
127( 28.3) |
40-49 |
14( 38.2) |
22( 33.3) |
51( 33.3) |
136( 30.3) |
above50 |
14( 38.2) |
25( 37.9) |
52( 34.0) |
124( 27.6) |
Intermediate School Gradute and Below |
12( 35.3) |
21( 31.8) |
51( 33.3) |
162( 29.4) |
High School Graduate |
16( 47.1) |
29( 43.9) |
62( 40.5) |
219( 39.7) |
College/University Graduate and Above |
6(17.6) |
16( 24.2) |
40( 26.1) |
170( 30.9) |
From page 21, the 1st quarter, 1998, issue of Analysis of Current Labor Situation Per Quarter, published by the Korea Labor Institute