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South Korean Unemployment Rate to Stay Near 4 Percent, Yim Says
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By Bill Varner and Sangim Han
April 23 (Bloomberg) -- South Korea’s unemployment rate will remain near the March level of 4.1 percent for at least the rest of the year before gradually decreasing to 3 percent, Labor Minister Yim Tae Hee said.
“We are going to deregulate the service industry and increase investment in the service industry,” Yim said in an interview yesterday at Bloomberg News headquarters in New York. “When that takes effect, the unemployment rate will show signs of recovery, but it will not happen in the near future.”
South Korea’s jobless rate hit a nine-year high of 5 percent in January before sliding to 4.9 percent in February and to 4.1 percent in March. In seasonally adjusted terms, unemployment fell to 3.8 percent last month from 4.4 percent in February and 4.8 percent in January.
Speaking through an interpreter, Yim said he anticipates unemployment will gradually drop to 3 percent “in line with the global trend” of increased hiring as the recession recedes.
Yim, 53, is in the U.S. to attend an April 20-21 meeting of G-20 labor ministers in Washington. A former aide to South Korean President Lee Myung Bak, he was named labor minister in a cabinet shuffle in September.
Lee’s administration, which faces local elections in June, made job creation a priority and pressed the central bank to keep interest rates at a record-low 2 percent to stoke the economy. Business investment is expected to rebound this year, with the Bank of Korea raising its 2010 economic growth forecast to 5.2 percent, the fastest pace since 2006.
Rating Raised
Moody’s Investors Service this month increased the nation’s credit ratings to A1 from A2, citing accelerating economic growth and a “relatively small” deficit. Exports surged in the first three months, and the central bank forecast the economy probably grew 1.6 percent in the first quarter.
“We are seeing signs of the recovery of the real economy, so the economic situation helped to address the jobs issue,’ Yim said. “Private business has started to employ people.”
A “historic” agreement in February between labor and management to “share pains as we overcome this crisis” also is helping to stabilize the jobs market, he said. At the same time, the government has pledged to “enhance the social safety net” for workers through job training and unemployment benefits.
A concern, he said, is competition from China and Vietnam in “unskilled manufacturing” sectors such as textiles and shoes. “That is the area where unemployment happens,” he said.
Yim said the government will provide vocational training so those workers can shift to “high value-added industries.”
To contact the reporters on this story: Bill Varner at the United Nations at [email protected]; Sangim Han in Seoul at [email protected];
Last Updated: April 22, 2010 19:53 EDT
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Bill Varner and Sangim Han
April 23 (Bloomberg) -- South Korea’s unemployment rate will remain near the March level of 4.1 percent for at least the rest of the year before gradually decreasing to 3 percent, Labor Minister Yim Tae Hee said.
“We are going to deregulate the service industry and increase investment in the service industry,” Yim said in an interview yesterday at Bloomberg News headquarters in New York. “When that takes effect, the unemployment rate will show signs of recovery, but it will not happen in the near future.”
South Korea’s jobless rate hit a nine-year high of 5 percent in January before sliding to 4.9 percent in February and to 4.1 percent in March. In seasonally adjusted terms, unemployment fell to 3.8 percent last month from 4.4 percent in February and 4.8 percent in January.
Speaking through an interpreter, Yim said he anticipates unemployment will gradually drop to 3 percent “in line with the global trend” of increased hiring as the recession recedes.
Yim, 53, is in the U.S. to attend an April 20-21 meeting of G-20 labor ministers in Washington. A former aide to South Korean President Lee Myung Bak, he was named labor minister in a cabinet shuffle in September.
Lee’s administration, which faces local elections in June, made job creation a priority and pressed the central bank to keep interest rates at a record-low 2 percent to stoke the economy. Business investment is expected to rebound this year, with the Bank of Korea raising its 2010 economic growth forecast to 5.2 percent, the fastest pace since 2006.
Rating Raised
Moody’s Investors Service this month increased the nation’s credit ratings to A1 from A2, citing accelerating economic growth and a “relatively small” deficit. Exports surged in the first three months, and the central bank forecast the economy probably grew 1.6 percent in the first quarter.
“We are seeing signs of the recovery of the real economy, so the economic situation helped to address the jobs issue,’ Yim said. “Private business has started to employ people.”
A “historic” agreement in February between labor and management to “share pains as we overcome this crisis” also is helping to stabilize the jobs market, he said. At the same time, the government has pledged to “enhance the social safety net” for workers through job training and unemployment benefits.
A concern, he said, is competition from China and Vietnam in “unskilled manufacturing” sectors such as textiles and shoes. “That is the area where unemployment happens,” he said.
Yim said the government will provide vocational training so those workers can shift to “high value-added industries.”
To contact the reporters on this story: Bill Varner at the United Nations at [email protected]; Sangim Han in Seoul at [email protected];
Last Updated: April 22, 2010 19:53 EDT
