Korea’s construction slump exacerbates job losses

[Photo by Park Hyung-ki]

As a prolonged slump in Korea’s construction industry continues, the number of employment insurance subscribers in the sector has fallen for 13 consecutive months, while new unemployment benefit applications have surged by 23 percent over the past year.

According to the Ministry of Employment and Labor on Monday, the number of employment insurance subscribers in the construction sector totaled 767,000 in August 2024, down 13,000 from the previous year and marking a steady decline since August 2023.

The downturn is also evident in age-based data. Among those in their 40s, a key segment of the workforce, 3.54 million were enrolled in employment insurance. This is a drop of 42,000 year-on-year, with the construction sector recording the sharpest decline of 16,000.

As job losses mount in the industry, more workers are turning to unemployment benefits. New unemployment benefit applications in the construction sector hit 15,000 in August, up 22.9 percent (2,800) from a year earlier.

The number of workers receiving unemployment benefits in the construction sector rose to 72,700, a 17.8 percent (11,000) increase compared to the previous year. This figure has been climbing by over 10,000 annually since August 2022, when it stood at 52,200.

This trend contrasts with the overall decline in both new unemployment benefit applications and recipients across all industries, highlighting the severity of the construction sector’s downturn. New unemployment benefit applications across all sectors totaled 86,000 in August, down 0.6 percent (500 applicants) year-on-year.

As of the end of August, the nation’s overall employment insurance subscribers totaled 15.45 million, up 220,000 subscribers (1.4 percent) from the same month in 2023. The service industry led the growth with 192,000 new subscribers, particularly in health and welfare, business services, professional science, accommodation and food, and transportation and storage. The manufacturing sector added 38,000 subscribers, but excluding foreign workers under the employment permit system, the increase was offset by a decline of 3,000.