Unemployment is directly caused by poor growth of an economy. Lack of gainful employment or the overall state of joblessness usually occurs when potential workers who are well endowed with relevant skills and competences are unable to secure relevant job placements in spite of active search for the same. The prevalence of joblessness is referred to as unemployment rate (Romer 456). It can be quantified as a ratio or percentage. The figure is obtained by the quotient of unemployed people and those who are actively employed. This essay compares and contrasts the rate of unemployment between South Korea and the United States using the latest available statistics.
South Korea went through a long period of abject poverty after the conclusion of the Korean War. Its overall state of economic growth was grossly affected (Song 86). For over ten years after the war, South Korea was enlisted as one of the least economically stable countries across the globe. It can be recalled that the country recorded a meager US$79 GDP in 1960. This low growth rate hampered employment creation and also aggravated the rate of unemployment. However, the economic development of South Korea began to take shape after a major stimulus was injected in the industrial sector. Towards the end of 1980s, most jobs were created by the manufacturing industries. Besides, close to 30 % of the labor force was employed by the manufacturing industries (‘South Korea Unemployment Rate’ par.2). Most urban centers attract a significant labor force due to the available employment opportunities. The current South Korea is a well established market and a developed nation with a relatively shrinking rate of unemployment.
Demographics, education, and the overall economic performance are some of the key factors that affect the rate of unemployment in the United States (Romer 497). Economic analysts argue that a progressive business cycle is vital in the vibrant growth of an economy. Since 2000, the rate of job creation in the United States has been sluggish (Ribba 497). The recently concluded global economic turmoil led to a massive loss of about 9 million jobs. When economic prosperity is recorded over a given period, the rate of unemployment is equally brought down. Besides, unemployment can be reduced by establishing a number of economic stimulus packages. Minimal government regulation and reduction of taxes have also been cited by the US conservatives as potential strategies that can reduce the rate of unemployment. According to the perspectives gathered from the American public, creation of employment opportunities should be prioritized by the government of the day.
Before the end of April 2014, the rate of unemployment skyrocketed to 3.70 % in South Korea (‘South Korea Unemployment Rate’ par. 3). During the month of March, the rate of unemployment was stable at 3.5 %. However, the stretched mean on the rate of unemployment between 1999 and 2014 was recorded at 3.64 percent. The country experienced the worst rate of unemployment in mid 1999 when it recorded a 7.1 % flop in employment opportunities. Nonetheless, the rate was extremely eased down in November 2013 with the least rate of unemployment at 2.9 %. According to the data provided by Statistics Korea, fewer jobs were added to the country’s employment system in the month of April 2014. As it stands now, there are over one million legible persons who have not been employed in South Korea. The year-on-year increase stands at approximately 24.9 % (‘South Korea Unemployment Rate’ par.5).
It is also vital to mention that slightly over 25 million people were in full gainful employment in the month of April 2014. This was similar to a 2.3 % increase in the rate of employment on an annual basis.
In terms of job creation, the largest job creators were the retail and wholesale divisions. An additional 300,000 jobs were created by the two sectors in the month of April 2014. This marked a significant increase compared to the same month in 2013. On the other hand, the construction sector experienced a fall of 0.2 percent in job creation while agriculture recorded a decline in job creation by about 1.8 %.
46 % in the total number of regular workers was recorded in April 2014. The percentage rise was \slightly above 12 million employees. In contrast, a significant decrease was recorded in the population of self employed and daily employees. Self employed workforce decreased by 0.1 percent while a six percent decline was experienced in the population of daily employees.
Data availed by Statistics Korea also reveal that the seasonally adjusted jobless rate recorded a major shift. For example, the figure rose to 3.9 % in February 2014. However, a 3.2 % jobless rate was witnessed during the month of January 2014. The number of job seekers also went up in February bearing in mind that a high number of young job seekers had recently graduated from various higher learning institutions. The figure below illustrates unemployment rate in South Korea with respect to the overall percentage of the labor force.
In April 2014, the United States’ rate of unemployment went down to about 6.3 % (‘United States Unemployment Rate’ par. 1). This was a slight drop of 0.4 percent. Between 1948 and 2014, the mean rate of unemployment in the US has been approximately 5.83 %. The worst hit year was 1982 when the country recorded a 10.8 % unemployment rate. Nonetheless, the month of May 1953 experienced a low of 2.5 % in terms of unemployment (‘United States Unemployment Rate’ par. 5). According to the data provided by the United States Bureau of Labour Statistics, about 9.8 million people were unemployed in the month of March 2014. This figure declined by 733,000 in April 2014. The rate of unemployment in the US had remained almost stable for a period of four months before the shift in April. Since the beginning of July 2013, a 1.2 % decline in unemployment rate has been reordered while the number of people who are not employed has reduced by about 1.9 million. The chart below indicates the rate of unemployment in the US from the month of July 2013 to April 2014.
Furthermore, major worker groups were documented in terms of the decline in the rate of unemployment. The major breakdowns are indicated in the table below:
From the above table, it can be argued that the blacks and teenagers are among the worst affected worker groups in terms of unemployment.
Employed new entrants also recorded a major decline in the rate of unemployment. A total decrease of 126,000 was recorded in the population of unemployed new entrants. In addition, 417,000 unemployment re-entrants were reduced from this category of worker group. Moreover, only 5.2 million people were documented as individuals who had wound up temporary jobs and also lost their jobs.
Long term employment went down by about 300, 000. The number of potential workforce that has not been employed has declined by close to 910,000 within a period of one year. During the same month of April, a decrease of 806,000 was witnessed in the civilian labor force.
To recap it all, it can be concluded that the rate of unemployment in South Korea has gone up over the recent months. In contrary, the rate of unemployment in the United States significantly eased down especially in the month of April 2014. The economic growth is generally in the recovery path owing to slow down of the global economic crisis that began in 2008. Additional jobs have been created in the United States and as a result, various worker groups are minimally affected by the current state of unemployment. Although South Korea also managed to create additional jobs in the months of March and April 2014, the net impact could not be remarkably felt in the entire economy because the rate of unemployment remained relatively the same. Self employment has also improved in both South Korea and the United States. Self employment has reduced the rate of unemployment in both countries. Finally, it can be argued out that both countries are in the process of economic recovery because the overall rate of unemployment has been reduced over the past 10-12 months.
Ribba, Antonio. “The Joint Dynamics of Inflation, Unemployment and Interest Rate in the United States since 1980.” Empirical Economics 31.2 (2006): 497-511.Print.
Romer, David. Unemployment: Advanced Macroeconomics. New York: McGraw-Hill, 2011. Print.
Song, Byung-Nak. The Rise of the Korean Economy. New York: Oxford University Press, 2003. Print.
South Korea Unemployment Rate. 2014. Web. 19 May 2014.
United States Unemployment Rate. 2014. Web. 19 May 2014.