SEJONG -- If current trends continue, the annual tally for payouts for the jobless will hover around an unprecedented 12 trillion won ($10.8 billion) in 2020, data from the Korean Employment Information Service showed.

Over the first 10 months of this year, the payment of unemployment benefits came to 10.26 trillion won. This has already outstripped the former record high of 8.35 trillion won in 2019.

The 2020 projection would be a 160 percent increase compared to 2015, when the yearly benefit payouts stood at 4.54 trillion won.

Though the novel coronavirus has accelerated growth of the payment volume, the speed also has been triggered by drastic hikes in minimum wages. The government had to sharply raise the lower ceiling of unemployment benefits in proportion to the lower ceiling of the minimum wages.

The KEIS data for the past decade has backed up the accelerated speed: The payouts ranged between 3 trillion-4 trillion won from 2010 to 2013, and ranged between 4 trillion-5 trillion won from 2014 to 2016.
 

After recording a 5 trillion-won range in 2017, the figure climbed to 6.69 trillion won in 2018, and to 8.35 trillion won in 2019.

The minimum wages grew 7.2 percent on-year to 1.35 million won per month in 2017, which was decided during the previous Park Geun-hye administration. But it shot up 16.3 percent on-year to 1.57 million won in 2018, and by 10.8 percent to 1.74 million won in 2019.

The lower limit in payment of unemployment benefits has to be set at 90 percent of the minimum wage.

In this situation, more and more market insiders are raising the possibility that the employment insurance funds will be depleted in the coming years. They are calling for the Ministry of Employment and Labor to push for revision of the payment rules.

In October 2020, the number of recipients of unemployment benefits came to 649,413, with growth rate posting nearly 50 percent, compared to a year earlier in October 2019, when the tally was 435,447.

By region, Jeju Province saw the number of monthly recipients surge more than 100 percent from 4,410 to 9,046 over the corresponding period. The island was holding a high portion of the self-employed in sectors including coffee shop owners and those engaged in tourism industry, both of which have been hit hardest by the pandemic.

The number of benefit recipients in Seoul climbed from 83,398 in October 2019 to 126,277 in October 2020.

By age, recipients in their 50s accounted for the largest proportion at 25.4 percent in October 2020, followed by those in their 60s with 22.5 percent.

Twenty-somethings accounted for the smallest proportion, at 14.8 percent, but their number surged by 79.3 percent from 53,702 in October 2019 to 96,301 in October 2020.

Women outnumbered men among benefit claimants in the month, accounting for 50.6 percent of the total.

A division manager of the local tourism industry said, “Many young employees with short careers at our company were initially pressured to quit. Most of them are reportedly seeking jobs in other industries.”

By Kim Yon-se (kys@heraldcorp.com)