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S. Korea to create 200,000 new jobs for youth by 2017

July 27, 2015
South Korean Deputy Prime Minister and Minister of Strategy and Finance Choi Kyung-hwan (Yonhap)

South Korean Deputy Prime Minister and Minister of Strategy and Finance Choi Kyung-hwan (Yonhap)

SEOUL/SEJONG, July 27 (Yonhap) — South Korea plans to create 200,000 new jobs for the youth by 2017 while also working to permanently increase employment opportunities for young adults, the government said Monday.

The country’s jobless rate for those aged between 15 and 29 reached 10.2 percent at the end of June, marking an increase of 0.9 percentage point from the previous month while the country’s overall unemployment rate inched up from 3.8 percent to 3.9 percent over the cited period.

The youth unemployment rate has nowhere to go but up if left untackled, especially when the maximum retirement age for government and private workers is set to be extended by two years to 60 next year, the finance ministry said in a press release.

Under its two-track efforts, the government, together with private firms, will work to create 200,000 new jobs by 2017 as a short-term measure to remove what is often referred to as a wall facing young, first-time job seekers.

This will include 75,000 full-time jobs from the public and private sectors while the other 125,000 will mostly consist of new internships from private companies.

Still, the government will seek to encourage private companies to hire more full-time workers, offering a tax break of up to 2 million won (US$1,705) for each intern or a part-time employee turned into a full-time worker, according to the ministry.

Also, the government will provide up to 10.8 million won in cash for each new full-time worker employed at companies that expand their overall workforce by introducing a wage peak, a mechanism to create additional job openings for new and young workers by lowering the wages of those nearing retirement in exchange for extending their time on the job.

The private sector promised its support and cooperation for the creation of new jobs for the youth in a joint declaration, signed by the finance ministry and six leading business organizations, including the largest, the Federation of Korean Industries.

“The joint measures announced by the government today seek to encourage the public sector to spearhead job creation while providing active financial and tax support for job creation in the private sector,” Finance Minister Choi Kyung-hwan said in a meeting with heads of the six business organizations.

“We make a promise to the people that the government and the business sector will together implement the above mentioned measures to create 200,000 new job opportunities for the youth by 2017,” said Choi, who is also the vice prime minister for economic affairs.

“We hope today’s promise will help remove problems now facing our young people while also providing hope to our future generations.”

The business community welcomed the state-led job creation efforts, with major conglomerates vowing to expand or maintain their employment on par with that of last year.

Hyundai Motor Group, which owns Hyundai Motor Co. and Kia Motors Corp., promised to stick to its employment plan to hire 9,500 workers by the end of the year, which would be slightly more than the largest ever of 9,100 hired last year.

LG Group joined the move by renewing its commitment to hiring 12,000 new workers this year — almost the same level as that of last year — despite the toughening global business environment.

Other conglomerates, such as SK Group and Hanwha Group, also expressed their strong support for the government’s job creation scheme for the youth.

The finance ministry said the new jobs will help boost the employment rate of those aged between 15 and 29 years by 1.8 percentage points.

However, the latest measures will benefit those aged from 15 to 34 as the government believes the age range for people receiving their first jobs has already risen that high.

The latest measures will also include efforts to ensure the creation of new jobs, especially for young and first-time job seekers, on a more permanent and regular basis.

Such efforts can partly be seen in the move to introduce a wage peak system.

In addition, the government will work to direct young workers to jobs at small and medium-sized firms, which have long been shun by job seekers due to low wages and poor working conditions.

To help improve working conditions at small companies, the government will increase the number of kindergartens and day care centers at economic clusters of small and medium-sized firms to 100 from the current 52.

It will also offer special public housing to those who work at a small or medium-sized company for more than three years, a two-year reduction from the current five years, the ministry said.

To help remove the so-called mismatch between the qualifications sought by employers and those taught at schools, the government will offer up to 30 billion won to each college changing their curriculums to meet companies’ requirements.

4 Comments

  1. Do Dream

    August 11, 2015 at 4:42 PM

    Good to hear of this initiative to decrease unemployment.

    Both youth and those getting near retirement age would do well to plan for the future. When companies don’t offer retirement packages we have to take investment into our own hands.

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