The youth unemployment rate in South Korea

September 2, 2017 Business

The unemployment rate among young person has reached 10.0 % , the highest record to be posted in a decennary. The unemployed surpassed one million for two back-to-back months and unemployment rate has come near to tag 5 % . As clip base on ballss, the economic system is demoing more distinguishable marks of recovery but the employment index continues to be blue.

Harmonizing to February ‘s employment tendency released by Statistics Korea on Wednesday, people without occupations increased 244,000 compared to last twelvemonth to number 1.169 million. As a consequence, February ‘s idle rate stood at 4.9 % , a 1.0 % point month-on-month addition.

The unemployment rate of those aged 15-29 marked 10.0 % . This is the first clip in 10 old ages since February 2000 ( 10.1 % ) for South Korea ‘s youth unemployment rate to hit dual figures. Sing February is the graduation season, the seasonal consequence seems to hold played a important function in conveying up the rate.

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However, the figure of the employed besides increased at the same clip. Employed people in January increased 125,000 against the same period last twelvemonth to tally 22.867 million. This is the highest addition to be posted since August 2008 ( 159,000 ) .

The unemployed increasing in tandem with the employed is a phenomenon witnessed when an economic recession turns to recovery.

Eun Sun-Hyun, caput of the employment statistics section at Statistics Korea said “ February is the graduation season and therefore, at this clip of twelvemonth, unemployment rate reaches its extremum. The upturn in economic system, a turning involvement in occupation making concerns and pupils hotfooting to happen work in private sectors after graduation have all resulted in conveying up the idle rate. ”

[ Written by Han Yea-Kyung- Minjeong Song/ edited by Soyoung Chung ] [ a“’ Maeil Business Newspaper & A ; mk.co.kr, All rights reserved ]

Commentary Number 1

Youth Unemployment Rate Exceeds 10 %

A low unemployment rate is one of the chief macroeconomic[ 1 ]ends of every authorities. However, Korea has been enduring from economic job which affect Korean economic system most harshly by increasing unemployment rate. This commentary will concentrate on unemployment which is relates to subdivision 3. Unemployment is defined as “ people of working age who are without work, available for work and actively seeking employment ” . By the definition, the unemployment rate is the figure of people who are unemployed expressed as a per centum of the entire labour force[ 2 ]. However, people who are taking non to work or non able to work would non see to the portion of the labour force, because they are non actively seeking employment.

There are two chief classs of unemployment – equilibrium and disequilibrium unemployment. Disequilibrium unemployment has two types, real-wage and cyclical unemployment, both occur when there are any conditions that prevents the labour market from “ uncluttering[ 3 ]“ . Equilibrium unemployment occurs when occupations exist but the people are either unwilling or unable to take these opportunities. There are three chief types of equilibrium unemployment, which are frictional, seasonal, and structural unemployment. In this instance, those connected to frictional and seasonal unemployment because the seasonal consequence and graduation season seem to hold affected to increase the unemployment rate.

However, the unemployed would confront several costs. When they received less income, this leads to hold a lower criterion of life and affects to hold costs of unemployment to the unemployed people themselves. Besides, unemployment will damage society, because it is impacting the rate of domestic force, offense and drug, etc. Furthermore, there would be the chance cost[ 4 ]of the authorities ‘s disbursement on unemployment benefits[ 5 ], because the authorities may hold to pass more money to work out the societal jobs created by unemployment. Therefore, unemployment airss great costs on an economic system therefore the authoritiess try to cut down the degree of unemployment.

This article shows February ‘s idle rate increased as they were looking for occupations after graduation and besides because of the seasonal consequence that February is at the terminal of winter. Labors go forthing or losing one occupation would largely put out to happen another. This is related to seasonal and frictional unemployment, which occurs when people are in between occupations or they have left instruction waiting for taking up their occupation and this period is largely short-run. This is natural for people to go forth occupations by holding hopes to happen better topographic points, therefore this is non a serious job in an economic system because of its short-run nature. However, harmonizing to the article, the chief issue is that unemployment rate increased for back-to-back months, so if it has non solved, so it will be continue to making into the degree of long-run unemployment.

There are ways that authorities can cut down this degree of unemployment. If unemployment benefits were reduced, so the decrease in unemployment benefits lead to hold a lower criterion of life, so the unemployed workers might go more willing to work. Therefore, switch the aggregative supply of labour ( ASL ) to the right, ASLa‚? to ASLa‚‚ .

Average ( existent ) pay rate

Number of workers

ADL

ASLa‚‚

ASLa‚?

Wa‚?

Qa‚?

Wa‚‚

Qa‚‚

The y-axis on the diagram represents the monetary value of labour, as measured by the mean existent pay rate. The aggregative supply of labour curve ( ASL ) illustrates the entire figure of an economic system ‘s workers that are willing and able to work in the economic system at every given mean pay rate.

However, the article mentions the figure of the employed besides increased at the same clip, when the unemployment rate increased. This is because an economic recession turns to recovery, therefore consumers receive more income that leads to hold a higher criterion of life, so this affects on displacement supply curve to the right as displacement the demand curve to the right, and so provider would spread out employment. But it seems like it is hard to happen their occupations and there are non plenty occupations for all the unemployed due to additions in unemployment rate. Therefore there should be making more occupations and besides bettering the flow of information from possible employers to all the unemployed through the Internet occupation sites, newspapers, and employment counsellors.

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