English I

The Transformation of Economic Activities


 National economic activities can be reviewed through the characteristics of employment and consumption. First, employment can be reviewed by examining the employment rate, the unemployment rate, and the employment structure. Labor force participation rate is the share of the economically active population (both employed and unemployed) as a percentage of the population group older than 15 years of age. It is the most typical indicator to evaluate a nation’s active economic activity. The employment rate is the share of the employed as a percentage of the entire population group older than 15 years of age, and the unemployment rate indicates the share of the unemployed as a percentage of the economically active population. The unemployment rate does not include those who gave up on employment after trying to get a job for a long time; thus, it can be underestimated. In this context, the OECD recommends that the unemployment rate be used along with the employment rate for evaluating the economy. The employment rate is lower in metropolitan areas even though there are a lot of jobs, but this is due to the high urban population that skews the statistic. On the other hand, the unemployment rate is high in urban areas due to the high number of job seekers compared to the size of the urban population. In non-urban areas, even though the share of the non-economically active population is high, unemployed adults are either not interested in working or are not active job seekers; thus, they are not counted in the statistics.

   The Consumer Price Index, which is one of several consumption indicators, measures the average price fluctuation of products and services purchased by households to meet daily needs. It is calculated by comparing a standard base point that is based on prices in the year 2010 as a quotient of 100. In other words, it provides the average measurement of inflation of overall household consumption as one of the macroeconomic indices. For instance, if the Consumer Price Index in 2010 was 100, it would have been 11.0 in 1975, 34.2 in 1985, 60.2 in 1995, and 86.1 in 2005 taking inflation into account through the years.   There were a number of crises during Korea’s transformation into an economically stable world power, and they deeply affected national economic activities. The two oil crises in the early and late 1970s, the decrease in competitiveness due to labor disputes and wage increases in the late 1980s, the Asian foreign exchange crisis in late 1990s, and the global financial crisis of the late 2000s all had profound effects on Korea’s economy. During the 1997 Asian foreign exchange crisis, Korea’s economic growth rate, the GDP, import export ratios, the foreign reserve and other economic indicators were particularly damaged while the exchange rate and interest rates soared. This led to a lower employment rate, higher unemployment rate, which cast a shadow over the national economy. Fortunately, due to intensive restructuring in both private and public sectors, the economy recovered relatively quickly and it has started to show growth once again.