By Yoon Ja-young
The government plans to introduce an apprentice school where students can get job-training. Those who work at small- and medium-sized businesses after graduating high school will also get government incentives.
Those are part of government measures announced by the Ministry of Strategy and Finance, Tuesday, to boost youth employment.
The announcement came amid growing concern over the job market, especially among young people.
"Jobless young people account for 40 percent of the total number of the unemployed, and 5 million people are not participating in the economy due to studies or other reasons. This can seriously impair the growth potential of the economy," Strategy and Finance Minister Hyun Oh-seok said.
While the overall employment rate has been recovering, to 64.5 percent in March from 61.5 percent in 2000, the youth employment rate has been sliding during the same period, to 39.5 percent from 43.4 percent. This is far below the 57.7 percent in Germany, 69.7 percent in Switzerland and the OECD average of 50.9 percent.
The low employment rate is due to increasing numbers of economically inactive young people, who seek higher diplomas or prepare themselves to be better job candidates instead of immediately seeking jobs.
To encourage these people to enter the job market, the government said it will provide a 1 million won incentive each year for high school graduates who work at small and medium-sized companies. The money will be given for up to three years.
It also prepared incentives for businesses employing high school graduates. If they re-employ the employee after he returns from two years' obligatory military service, the government will pay up to 250,000 won of his monthly salary.
The government announced measures to bolster vocational training as well. Apprentice schools benchmarking those in Germany or Switzerland will be set up, where students will get job training at enterprises for three or four days a week while attending school classes once or twice a week.
The government explained that it is focused on setting up an atmosphere encouraging young people to enter the job market earlier and helping them continue to work.
"The measure will take us closer to the target of creating 500,000 jobs for young people. It will be a tipping point making a qualitative change," Hyun said.
Structural problem remains
However, experts are skeptical whether the measures will dramatically increase youth employment. As long as discrimination based on academic background exists, structural problems will remain.
"There is mismatch of demand and supply in the job market. Businesses say they can't find the right person, while jobseekers say they can't find decent jobs," said Park Sung-joon, a research fellow at the Korea Economic Research Institute.
He said that basically, there are too many people with college diplomas. Last year's statistics showed that 70.7 percent of young people go to college in Korea, which is the highest ratio among OECD member countries.
As there still is social discrimination between those with and without college diplomas, most students seek to get a higher education. However, once they graduate from college, there are only a limited number of jobs that meet their expectations.
"If you look at the industry side, small- and medium-sized companies have problem finding people to work with them. However, young people don't want to work there," Park said.
"The government wants a change in the long-term perspective," said labor minister Phang Ha-nam. "Though it may take time to make specific achievements, we will make qualitative structural reform in youth employment," he said.
The government plans to introduce an apprentice school where students can get job-training. Those who work at small- and medium-sized businesses after graduating high school will also get government incentives.
Those are part of government measures announced by the Ministry of Strategy and Finance, Tuesday, to boost youth employment.
The announcement came amid growing concern over the job market, especially among young people.
"Jobless young people account for 40 percent of the total number of the unemployed, and 5 million people are not participating in the economy due to studies or other reasons. This can seriously impair the growth potential of the economy," Strategy and Finance Minister Hyun Oh-seok said.
While the overall employment rate has been recovering, to 64.5 percent in March from 61.5 percent in 2000, the youth employment rate has been sliding during the same period, to 39.5 percent from 43.4 percent. This is far below the 57.7 percent in Germany, 69.7 percent in Switzerland and the OECD average of 50.9 percent.
The low employment rate is due to increasing numbers of economically inactive young people, who seek higher diplomas or prepare themselves to be better job candidates instead of immediately seeking jobs.
To encourage these people to enter the job market, the government said it will provide a 1 million won incentive each year for high school graduates who work at small and medium-sized companies. The money will be given for up to three years.
It also prepared incentives for businesses employing high school graduates. If they re-employ the employee after he returns from two years' obligatory military service, the government will pay up to 250,000 won of his monthly salary.
The government announced measures to bolster vocational training as well. Apprentice schools benchmarking those in Germany or Switzerland will be set up, where students will get job training at enterprises for three or four days a week while attending school classes once or twice a week.
The government explained that it is focused on setting up an atmosphere encouraging young people to enter the job market earlier and helping them continue to work.
"The measure will take us closer to the target of creating 500,000 jobs for young people. It will be a tipping point making a qualitative change," Hyun said.
Structural problem remains
However, experts are skeptical whether the measures will dramatically increase youth employment. As long as discrimination based on academic background exists, structural problems will remain.
"There is mismatch of demand and supply in the job market. Businesses say they can't find the right person, while jobseekers say they can't find decent jobs," said Park Sung-joon, a research fellow at the Korea Economic Research Institute.
He said that basically, there are too many people with college diplomas. Last year's statistics showed that 70.7 percent of young people go to college in Korea, which is the highest ratio among OECD member countries.
As there still is social discrimination between those with and without college diplomas, most students seek to get a higher education. However, once they graduate from college, there are only a limited number of jobs that meet their expectations.
"If you look at the industry side, small- and medium-sized companies have problem finding people to work with them. However, young people don't want to work there," Park said.
"The government wants a change in the long-term perspective," said labor minister Phang Ha-nam. "Though it may take time to make specific achievements, we will make qualitative structural reform in youth employment," he said.
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