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How the COVID-19 pandemic has affected S. Korea's labor market
Updated: 2021-07-28 14:44:17 KST
The COVID-19 pandemic has changed the way we work.
Millions upon millions of people have been working from home, and face-to-face service jobs have in some cases disappeared altogether to be replaced by automation and other forms of technology.
It's looking more and more likely that some of these changes to the job market will be permanent, and so that means uncertainty in a lot of people's futures.
Today, we have our Bae Eun-ji here in the studio to tell us more about how the pandemic has affected the labor market in South Korea.
Eun-ji, good to have you back.

Good afternoon.

So, as I just mentioned, the pandemic has had some effects on the labor market that could be permanent like more automation and less in-person customer service.

A lot of small business owners are now turning to automation obviously because it reduces risk in the pandemic, but also because it saves them money.
Here we are talking about people who run coffee shops, small restaurants and so on who are considered to be self-employed.
If an employee tests positive for COVID-19 a business might be disrupted for a few days or even close down for a short period.
But the benefit of machines and robots is that they can't be infected.
The latest data from Statistics Korea clearly shows that small businesses are hiring fewer people.
Just last month, the number of self-employed people who were not employing others was up by 112-thousand compared to the same month the year before.
This figure has been rising for 29 months in a row.
So of all the self-employed people in the country, only 23 percent have employees.
And this is the lowest figure since 1999.

So with automation, employers see a way to reduce risk while also saving money.
But there's also a segment of customers who like contact-free service.
In Korea, a lot of coffee shops let you order from a machine.
But now also, there are some convenience stores that have no staff late at night, which something that the pandemic may have accelerated.

That's right.
Some convenience stores in Korea are going unmanned, at least at night.
They have staff during the day, but from 11 PM to 6 AM, customers serve themselves.
You go into the store at night by simply inserting your credit card into the card reader at the door.
And you use the self-checkout when you leave.
The convenience store chain Emart24 says out of about 5,500 of its franchise stores across the country around 150 stores are operated in this way.
Even though they're unmanned, the stores also sell alcoholic beverages.
This beer fridge has a QR scanner to verify your age using your drivers license and then you put your credit card into the machine to open the door.
But the coolest thing is that to pay you don't have to scan your beer.
A camera sees which products you've chosen, and charges them to your card when you close the door.

"We have decided to use this vending machine to provide convenience to customers and to run our stores more effciently."

The company also said it plans to expand the use of this machine to sell products other than alcohol.
This could pave the way for retailers to launch fully unmanned convenience stores running 24/7.

From what you have told us so far automation does seem to be speeding up.
With this trend and the economic downturn from the pandemic the job market must be getting worse.
Tell us about the current situation and what the government should do to resolve this.

Well Devin since the pandemic hit, the country has seen a high rate of long-term unemployment.
Last month the number of people who have spent more than 4 months looking for a job amounted to 357-thousand.
Compared to before the pandemic, in February 2020, this is an increase of 26.4 percent.
But even worse, in June, the number of people who were able to work but had given up and left the labor force altogether stood at 583-thousand.
That's an increase from a year earlier of 46-thousand.
The figure has been recording an all-time-high for 16 months in a row now.
An economist from the Bank of Korea says it's really important to have these people engaged in the workforce as soon as possible.
And he expressed hope that automation can actually create new jobs so the government should help workers who are at a high risk of being replaced to find jobs related to this field.

"For instance, with more self-ordering kiosks the manufacturers will need to hire more people. People who lost their job can maybe get a job there or if not, get other jobs that have been newly created through this kind of automation. So the government needs to help out these people move on to a new job."

Sounds like it's important for people who lost their jobs because of automation to acquire new skills and move onto a whole new job rather than to look for a similar job.
What other issues are there in the labor market?

Another issue in the labor market is that large businesses have started hiring again, but smaller ones have not been able to.
This shows how the pandemic has widened this gap between large companies and small companies.
In Korea, large businesses are defined as those with more than 300 employees.
A report by the country's central bank shows that employment at large businesses increased by 6.4 percent last month compared to before the pandemic.
Meanwhile, the workforce at smaller businesses shrank by point-eight percent.

"Big companies getting bigger creates high barriers to entry for small businesses. This will have a negative impact on businesses hiring new people."

He said the government should find ways to help SMEs hire more people.
Already in the pandemic, we've seen, for example, bigger relief payments going to companies that keep their employees.
There are also new opportunities opening up for training.

Eun-ji, thank you for the thorough reporting today.

Thank you.
Reporter :