SEOUL, Apr. 23 (Korea Bizwire) – The employment-to-gross domestic product (GDP) ratio fell to a record low last year, data from the central bank and statistical agency showed on Monday, with the speed of the fall causing more alarm among observers of the economy.
The ratio measures the number of newly employed workers per 1 billion won (US$936,943) of GDP, a gauge of people finding work in proportion to economic growth.
Data from the Bank of Korea and Statistics Korea put the ratio at 17.2 last year, down to a new record low from 17.5 of the previous year.
Economy watchers say the ratio naturally falls with technological development as machines replace humans at production facilities. The speed of the fall, they note, is more alarming than the band of the fall.
The ratio was 43.1 in 1990. It fell to 29.6 in 1997, and after dipping to under 20 at 19.9 in 2009, it hasn’t rebounded.
The gap between growth in the national economy and in employment was also widening, according to the data.
Last year, South Korea’s economy grew 3.1 percent, but the number of employed rose 1.2 percent. The difference between the two had narrowed to 0.9 percentage point in 2014 but grew to 1.7 percentage points in 2015 and to 2 percentage points in 2016.
“A fall in the employment-to-GDP ratio is partly inevitable, but the problem is that it is falling too fast,” Kim Joon-young from the Korea Employment Information Service said.
“The ratio is nominally higher in the service industry. We need to boost the services sector and take long-term measures to develop the value-added service industry,” Kim said.