Temporary Unemployment Could Become Permanent

A record 1.61 million were temporarily out of work last month, and there are fears that lots of will become permanently unemployed even if the coronavirus crisis is contained.

Hana Tour, Korea's No. 1 travel agency, has located 2,100 of its 2,500 staff on paid leave. "Travel demand is unlikely to recuperate within this year," a Hana Tour staffer said. "We hope to keep all our staff but don't know what to accomplish once government support stops in September. Huge layoffs are possible if travel demand will not recover at that time." 

Some 219 small travel agencies have closed because the epidemic erupted, and the kinds that remain open face an uncertain future.

"Travel demand through the summer season, which makes up about half of annual sales, is unlikely to recover," an official at the Korea Association of Travel Agents said. "There's a solid potential for a string of bankruptcies among small travel agencies that don't possess enough cash reserves, and furloughed workers may not have employment to come back to."

The situation is also serious in the hotel industry.

Businesses that put staff on paid leave are only getting assistance from the government for 180 days. If the economy fails to pick up after that period, massive layoffs are waiting for you.

Lee Geun-tae at the LG Economic Research Institute said, "Unemployment that were only available in the service sector is spreading to manufacturing and other sectors, raising fears of massive job losses."