As the job market freezes, there are growing concerns about the depletion of the employment insurance fund. The number of applicants for job-seeking benefits is increasing rapidly, because the number of employed is not increasing. According to the “Labor Market Trends for January 2021,” released by the Ministry of Employment and Labor on the 8th, the number of applicants for job-seeking benefits exceeded 200,000 for the first time with 212,000. The number of unemployment benefits applicants increased sharply as the government’s public job contract period was completed at the end of last year, mainly in industries hit by the Corona 19 direct hit, such as wholesale and retail and accommodation.
On the other hand, the pace of increase in employment insurance subscribers is worrisome as the pace of growth has slowed significantly this year. The number of employment insurance subscribers last month was 13835,000, an increase of only 151,000 compared to the same period last year. This is the smallest increase since February 2004. Employment insurance subscribers declined for a while in May of last year, during the first corona19 epidemic, but steadily increased. However, as the spread of Corona 19 seldom subsided, the increase was stopped. The surge in job-seeking benefit applicants and the stagnation of employment insurance subscribers are likely to continue for the time being. This is because short-term job contracts in the public sector will also be terminated one after another, with no room for an increase in the number of employed in a short period of time.
The Employment Insurance Fund turned to a deficit in 2018, the year after the inauguration of the current government, and the deficit is increasing year by year. The amount of deficit increased from 808.2 billion won in 2018 to 2.87 trillion won in 2019, reaching a maximum of 7.46.5 trillion won as of September last year. Last year, the amount of job search benefits reached 12 trillion won, the highest ever. It is clear that the deficit will widen as expenditures are still increasing, with job-seeking benefits reaching 1 trillion won for two consecutive months. In addition, as the government is pushing ahead with the “All National Employment Insurance” policy, the rate of depletion of funds can be accelerated.
In this year’s business report, the government said it would come up with measures to prevent exhaustion in the first half of the year, but we must hurry. Efficient fund expenditure and business restructuring are also necessary, but the key is an increase in the employment insurance premium rate. It is not an easy task because it requires social consensus between the labor and management, but it is necessary to quickly draw up a compromise plan to avoid putting the burden on future generations.
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