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| Gyonggi Province Governor Nam Kyung-pil explains a plan to foster better working environments for employees at small- and medium-sized enterprises during a press conference, Aug. 16. / Courtesy of Gyeonggi Province |
By You Soo-sun
Gyeonggi provincial government has rolled out a plan to financially support employees at small- and medium-sized enterprises (SMEs) in the province. The plan, which aims to encourage employees early in their careers, is expected to take effect in November.
Included are wage subsidies by direct cash transfers, a government-funded savings plan, and welfare provisions. Employees between the ages of 18 and 34 who work at least 36 hours a week may apply for one of these programs.
In a press briefing held Aug. 16, Governor Nam Kyung-pil described the objectives for the plan as "inducing longer-term employment for small- and medium-sized companies based in Gyeonggi Province" and "attracting new job-seekers to these companies." Optimistically, he said, "I expect this will help solidify a virtuous cycle in which SMEs will become more competitive and hence lead to healthier quality jobs."
The plan aims to reduce the wage gap between big and smaller-sized firms here, cited as being the main cause of the low labor supply and high turnover rates despite the high unemployment among job-seekers. According to the government, the turnover rate for first-year employees is 32.5 percent at SMEs compared to 9.4 percent at large conglomerates. There is also a stark contrast between the average years a person stays at these firms: 1.5 years for the SMEs compared to 11.4 for the conglomerates.
Specifically, the province will provide a direct cash transfer of 300,000 won monthly for a period of two years which will be given to 20,000 individuals who earn less than 2 million won a month.
To encourage savings, the government will fund up to 300,000 won a month in savings for a span of 10 years. The amount of funding will vary depending on the amount put up for savings by the beneficiaries themselves.
Lastly, welfare points will be given to employees based on the number of months they have worked for one firm. One million won will be given to those who have worked between 12 to 24 months; 1.2 million will be given to those who have stayed with the same company for more than two years.
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