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The amount of state unemployment benefits hit a renewed record monthly high in July as the country’s manufacturing industry continued to suffer from massive job losses in a protracted slump from the COVID-19 pandemic, data showed Monday.

According to data from the Ministry of Employment and Labor, the government paid out 1.19 trillion won ($1 billion) in unemployment allowance in July, setting a new record in one month after 1.10 trillion won in June.

State unemployment allowance has renewed record highs for a sixth straight month in July since February when the coronavirus outbreak massively hit the country.

In July, 114,000 new applications were submitted for the state allowance. The number of recipients also reached 731,000, the historic high.

The allowance is paid out by the government out of employment insurance fund to support job seeking activities by unemployed people.

Data also showed that a total 13.908 million Koreans were subscribed to employment insurance in July, up 1.4 percent or 185,000 from the same period last year. The monthly increase in the number of Koreans subscribed to employment insurance hovered around 500,000 until last year. In 2020, however, the monthly growth slowed down due to COVID-19 to dip to 155,000 in May.

The sharp drop in the number of employment insurance subscribers in July was mainly due to the sluggish manufacturing industry – the backbone of the Korean economy.


In July a total 3.515 million Koreans were subscribed to employment insurance in the manufacturing sector, down 1.8 percent or 65,000 from the same period last year. It is the sharpest monthly fall since a fall of 99,500 in January 1998 in the face of the Asian financial crisis.

The number of employment insurance subscribers in the manufacturing industry started falling in September last year and widened loss throughout this year due to COVID-19.

The number of employment insurance subscribers in the electronics and telecommunications industry and the automotive industry fell 13,000 and 11,000, respectively, in July from the same month last year. The transportation and equipment industry that includes the shipbuilding sector also lost 3,000 subscribers.

By age group, the number of employment insurance subscribers aged 29 and younger fell 71,000 in July from a year ago as companies reduced new hiring due to the business fallout from the pandemic. The number of employment insurance subscribers aged 29 and younger fell 17,000 in March after the virus outbreak, 47,100 in April, and 63,000 in May.

The number of subscribers in their 60s and over increased 170,000 in July, widening from 125,000 in April, 141,000 in May, and 166,000 in June on the back of a rise in public sector jobs to support senior citizens.

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