This report illuminates the steady economic recovery stimulated by rising exports and the regional trends and implications of the rates of the officially unemployed and the unofficially unemployed (including those who gave up their job search, who are in unstable jobs, who are preparing to enter the job market, etc.). Despite the slump in private consumption and construction investment, Korea’s domestic business showed a steady recovery due to improvements in exports and the stabilized financial market. However, Korea’s GDP growth turned out to have remained intermediate (ranking eighth) among the 20 major players after the onset of the global financial crisis. Korea’s domestic demand growth, as can be seen in private consumption (ranking tenth) and total fixed capital investment (ranking 13th), proved to lag behind its GDP growth ranking, demonstrating the nation’s weakness in domestic demand. Employment, which influences household income and real purchasing power along with prices, is an important factor that determines the quality of life in a household. For this reason, employment security, in combination with price stabilization, forms the core objective of a nation’s economic policy. However, it was revealed that a substantially wide gap exists between employment conditions actually seen in the market and the official unemployment rate. Many advanced countries have strived to indicate employment conditions actually seen in the market by utilizing the rate of the unofficially unemployed that also counts marginally attached workers and the underemployed. This report focuses on regional differences in the rate of the unofficially unemployed that only reflects the underemployment of temporary employees working less than 18 hours per week. 
    Since 2000, the rate of the officially unemployed of the seven metropolitan cities, including Seoul, has exceeded the national unemployment rate, while that of the nine provinces has fallen short of it. This is because cities center on manufacturing and service industries, whereas the rural communities of the provinces engage in primary industries. Industrial structures and labor market characteristics unique to each region also contribute to this trend. The rate of the officially unemployed in the provinces focused on agriculture/forestry/fishery and tourism, such as Gangwon, Jeonbuk, Jeonnam, and Jeju, has fallen far short of the national average (3.6%). Over the past five years, the annual average rates of the officially unemployed of Incheon and Seoul have stood at 4.6% and 4.4% respectively, surpassing the national annual average by over 1%p. Ulsan and Gwangju recorded 3.3% and 3.4% respectively, both of which are similar to the national average. The national annual average rate of the unofficially unemployed has remained 7% since 2000, which is 1.9 times higher than the annual average rate of the officially unemployed (3.6%). The gap between the former and the latter widens when isolating the last five years, with the former increasing to 7.6%, which is 2.2 times higher than the latter (3.4%). This gap has widened relatively rapidly since 2000 in regions lacking a strong manufacturing foundation and quality jobs. In order to reinforce the employment security of the underemployed and improve consumer sentiment for employment conditions, region-specific measures, especially for regions with weak manufacturing foundations, are in dire need.

Won Dongah