Amid growing concerns about stagflation in the South Korean economy, the job market is also facing a cold wave. Following an increase in ‘business employees’ after a decline due to the aftermath of COVID-19, this figure fell into negative territory last month for the first time in 46 months.
According to the ‘January 2025 Business Workforce Survey Results’ released by the Ministry of Employment and Labor on the 27th, the number of employees in businesses with one or more workers decreased by 22,000 (or -0.1%) compared to the same month last year, totaling 18.895 million.
The rate of increase compared to the previous year has been steadily declining, remaining in the 80,000 range for two consecutive months before turning negative. Both new entrants (-110,000, -9.6%) and those leaving their jobs (-35,000, -3.0%) decreased, worsening the cold spell in the employment market.
Recently, it seems that sectors such as construction and wholesale/retail have seen significant declines due to a stagnant construction market and weakened consumer sentiment. Specifically, employment in the construction sector decreased by 114,000 (-7.8%), while the wholesale and retail sector saw a reduction of 3,500 (-1.5%). The manufacturing sector also saw a decrease of 11,000 (-0.3%), and the information and communication technology (IT) sector was down by 8,000 (-0.9%).
Kim Jae-hoon, director of the Labor Market Research Division at the Ministry of Employment and Labor, explained the downturn in manufacturing, noting a decrease of 4,000 in non-metallic mineral products and 3,000 in primary metals, which are closely related to the construction industry.
The decrease in employees was notably pronounced in businesses with fewer than 300 employees. Employees in companies with fewer than 300 workers totaled 16.553 million, down by 40,000 (-0.2%) from the same period last year. This sector returned to negative growth for the first time in 46 months, significantly impacting the overall decrease in business employees.
Conversely, the number of employees in businesses with 300 or more workers increased slightly to 3.34 million, growing by only 18,000 (0.6%) compared to the previous year. The growth rate of businesses with 300 or more employees has remained between 0.8% to 0.6% since dropping below 1% in June last year.
When classified by employment status, permanent workers increased by 12,000 (0.1%) from the same month last year, while temporary and day laborers decreased by 19,000 (-1.0%). The total wage for permanent workers was 4,918,000 won, a 4.2% (or 196,000 won) increase compared to the same month last year, while temporary and day laborers earned an average of 1.784 million won, a 4.4% (or 83,000 won) decrease.
Kim explained, “The average wage for temporary and day laborers decreased as the proportion of the construction sector, known for higher wage levels, shrank.”