SEOUL (BLOOMBERG) - South Korea's jobless rate hit the highest level in nine years, adding to evidence that President Moon Jae-in's minimum wage hikes are doing more to harm employment growth than they are to raise incomes.
The seasonally adjusted unemployment rate reached 4.4 per cent in January, the worst figure since January 2010, when it was 4.7 per cent. The median forecast of economists was for 3.8 per cent. Meanwhile, jobs growth slowed to 19,000, down from 34,000 jobs in December.
Mr Moon's administration hiked the minimum wage by 11 per cent this year, following a 16 per cent increase last year.
While few people disagree with the goal of raising wages, the very aggressive hikes have been criticised by business and economists for making it more difficult to employ people.
More vulnerable small businesses have been among the most badly affected.
Early this month, Finance Minister Hong Nam-ki attributed the weak jobs data to the base effect from a larger number of new jobs created a year earlier. Mr Hong's predecessor Mr Kim Dong-yeon was replaced late last year in a shake-up of senior officials to try to stem a backlash over Mr Moon's income-led growth policy.