Unemployment benefits hit record last year, exceeding pandemic peak

(News1)

South Korea’s unemployment benefit payouts hit a record high last year, surpassing even those seen during the COVID-19 crisis.

According to the Ministry of Employment and Labor on Monday, cumulative job-seeking allowance payments totaled 12.28 trillion won ($8.42 billion) last year, the highest since data were first compiled in 1997. The figure exceeded the previous peak of 12.05 trillion won recorded in 2021, when the pandemic severely disrupted employment.

Despite the rise in total payouts, the number of new applicants showed a modest decline. New applications for unemployment benefits stood at 98,000 in December, down 3.3 percent, or about 3,000 people, from the same month a year earlier.

The increase in payouts does not necessarily indicate a worsening job situation. “While total benefit payments have risen, the number of recipients has been decreasing,” said Chun Kyung-gi, head of the Future Employment Analysis Division at the ministry, adding that the trend also reflects broader social safety net coverage as the number of employment insurance subscribers continues to grow.

Labor demand, however, remained weak relative to supply. The job opening-to-applicant ratio, which indicates the number of available jobs per job seeker, fell to 0.39 in December. This means there were only 0.39 jobs available for each job seeker, matching the level seen in late 2009 in the aftermath of the global financial crisis.

The average number of employment insurance subscribers last year was 15.53 million, up 174,000, or 1.1 percent, from the previous year. This marked the smallest annual increase since employment insurance administrative statistics began in 1997.