[Commendation Award] State Incentives Needed for Less Desired Jobs
Ewha Womans University
In the aftermath of the financial crisis, a new trend seems to be spreading among many of my friends: they want to prolong their education by going to law school. We can deduce three reasons for this phenomenon. First is that in a time of uncertainty, youths are regressing toward a few professions that guarantee stability. Second is that companies simply aren't hiring enough youths. Third is that youths are putting off entering the small- and medium-sized enterprises that constantly report an under-supply of applicants.
Youth unemployment is hardly new news. However, the problem was exacerbated in recent years by a trend towards on-demand hiring rather than bulk hiring. This made new employment susceptible to economic fluctuations. Also, with the ongoing recession, companies are reluctant to hire youths with little to no work experience when even existing labor is hard to maintain. In June, Korea's unemployment rate was found to be at 3.9 percent, which was the second-lowest among OECD countries, after the Netherlands. The unemployment rate for youths, however, was found at 8.4 percent, double the average rate. This problem cannot be solved by any one government policy, corporate policy, or a determined individual. Youth unemployment should be dealt with on all three levels: government and educational institutions, corporations, and individuals.
Firstly, the government and educational institutions should provide incentives for students to enter "less desirable" fields. The current Korean labor market is supply-oriented. Unlike the market demand, there is a preference toward a few professions, such as law and medicine and a lack of interest in other professions, such as the pure sciences. It has recently come to the nation's attention that Korea does not have any Nobel laureates in the science fields. This is because the mean income in the fields of pure science is skewed; only a few succeed in the field. Since people tend to avoid this kind of risk, they compete for only those jobs that guarantee a more stable income. The over-supply of labor in some fields and the under-supply of labor in others result in unemployment. Thus, incentives such as government scholarships need to be strengthened in order to compensate for the unstable, thus less desirable, jobs. When the government-funded scholarship for science and engineering students increased from 60 million Korean won in 2003 to six trillion Korean won in 2007, the competitive rate for education in relevant fields grew from 4.36 to 13.49. In addition to government incentives, efforts are needed by educational institutions to enhance existing programs in less desired fields. Also, more universities that specialize in the education of particular fields ― such as the KAIST-ICC (IT Convergence Campus) ― should be founded. These actions on part of the government and educational institutions will garner population for previously less desirable fields.
Secondly, on the corporate level, the industry should actively establish relations with the academy. Again addressing the lack of balance in the labor market, the industry can educate and support students in skills that are actually demanded in their respective companies. For example, Toyota has collaborated with academic institutions all over the world. The company funds relevant departments and provides them equipment. In return, Toyota can handpick students who have shown prominence during their education. This will enhance on-demand hiring and will guarantee a consistent amount of new employments. Collaboration between industry and academy has the additional benefit of pre-employment experience. Because students employed straight out of school take time to adjust into the professional setting, companies like Toyota can provide internships during the summer or for a semester or two. This will reduce youth unemployment because work experience will give an edge to youths in competing with existing employees during the hiring process and will be an opportunity for youths to show the companies at firsthand what they can do.
Lastly, on the individual-level, youths should pursue jobs according to their own values and aspirations. The overflow of applicants in a few corporations causes unemployment. This phenomenon is partly due to youths seeking blindly for high-paying jobs or highly-ranked corporations in response to family or social pressure. They are reluctant to enter small- and medium-sized enterprises. Although the equation is not absolute, there is a trade-off between the name value of the corporation and the impact of your work. In some corporations, the name value will be high but it is hard for new employees to stand out. In other corporations, the name value of the company will not be great, but the impact of your work can be more direct. By balancing the two values, youths can determine which company to enter. Likewise, if youths select their jobs based on their values instead of external pressure, the labor supply between highly-ranked and lower-ranked companies will be evened out, lowering youth unemployment.
Unlike the myriad of factors involved in unemployment in general, causes and solutions of youth unemployment can be summarized into three levels. First, looking at the economy in general, a high preference for a limited number of professions led to a bad distribution of labor among different fields. Governments and educational institutions should level out the labor supply. Second, companies should actively participate in the education and pre-employment training of students if they do not wish to hire inexperienced youths. Lastly, youths should reexamine their intentions for refusing opportunities in small- and medium-sized enterprises by distinguishing external pressure from their own will. If all three solutions to youth unemployment can be achieved, then law school might not start to look like the only available option.